This information has been provided by
Australian law firm, Australian Conveyancing Services and is applicable in New South Wales
only.
IMPORTANT: Vendor Duty has been
abolished for Contracts exchanged (dated) 2 August 2005 or
later. See article
Vendor duty abolished from 2/08/05.
This Article provides a
summary of the most important terms of the legislation which
introduced Vendor Duty in 2004.
For a full discussion on all possible exemptions please
visit the
NSW Office of State Revenue site
The NSW Government introduced a new state tax on
property sellers effective for contracts dated from 1 June
2004 to 1 August 2005 inclusive. This discussion below
relates to contracts dated within this time period only.
NOTE: Transfer
forms signed after 1 June, 2004 in relation to contracts
dated pre 1 June, 2004 are exempt, but the Contract and the
Transfer still need to be stamped with the Office of State
Revenue as exempt.
How much stamp duty do I have to
pay?
The rate of duty is a flat 2.25% of the sale price (or the
value of the property, whichever is higher). There is no
threshold or sliding scale. The duty must be paid on or
before the settlement date.
All sellers have to pay the stamp duty unless they can claim
a full exemption or partial concession.
Am I entitled to a full
exemption/partial concession?
You as Seller may receive a full exemption or partial
concession as the case may be in the following
circumstances:
A. Principle place of Residence
To comply with the ‘principle place of residence’ rule, you
as Seller must satisfy one of the following:
you have lived in the
property being sold continuously for 2 years prior to the
sale. If you have owned the property for less than 2
years, you can still claim the full exemption as long as
you have lived in the property for the entire period of
ownership; or
You have lived in the
property for at least 3 out of the past 5 years prior to
sale; or
If you have been living
away from the property, you may still be able to get the
full exemption under the following circumstances:
You lived in the property as
your principle place of residence and then in the 6 months
prior to sale you left the property. You can count that
time away (0 to 6 months) as if you had been living there
during that time, as long as you didn’t get income from
the property during that time (eg rent it out); or
You lived in the property as
your principle place of residence for at least 2 years
before leaving the property (you can be away then for up
to 6 years after that up to the time of sale).
B.
Value of Property has not significantly increased
If the value of the property has not increased significantly
since you purchased it, then you may be entitled to a full
or part exemption. The ‘value’ of the property is its market
value or the price paid, whichever is the higher (normally
if the transaction is at ‘arm’s length’ this figure will be
the price paid).
NOTE:
Unfortunately, the Office of State Revenue will not take
into account the money that you as Seller have put into the
property to increase its value!
Here are the figures:
Full exemption where the
change in value between purchase and sale is 12% or less
Over 12% to 13% - 75%
concession
Over 13% to 14% - 50%
concession
Over 14% to 15% - 25%
concession
C.
Deceased Estates
Property passing from a deceased person to a beneficiary is
exempt whether the property was used as a principle place of
residence of not.
If the beneficiary then sells the property, they too will
receive the exemption from Vendor duty provided that:
The property was used by
the deceased as their principle place of residence AND the
beneficiary (or the Estate) sells it within 12 months of
the date of death; or
The beneficiary sells
the property at any time and meets the principle place of
residence test as stated above in section A.
D.
Other Uses
Exemptions may also be available for other situations, such
as properties used for farming/business purposes, sale of
new buildings, and lots in an unregistered plan of
subdivision. Please visit the
NSW Office of State Revenue
website for details.
