Jurisdiction - Australia
Australia – Stamp Duty Abolitions In South Australia And New South Wales: 2015-16 State Budgets.

8 July, 2015

Budgets for 2015-16 have been handed down by all state and territory governments except Queensland. This article summarises significant changes announced by the South Australian government, including the abolition of a number of heads of duty. New South Wales has also confirmed that previously scheduled abolitions will go ahead.


South Australia


On 18 June 2015 the South Australian Government announced the abolition of a number of heads of duty, including duty on conveyances of property other than residential or primary production land. This will significantly reduce the South Australian duty base.


A number of these changes were announced to be effective as of 18 June 2015. We note, however, that legislation giving effect to these changes is not expected to pass for some months, and may be subject to amendment. In the meantime, upon application by the taxpayer, the Government will provide ex gratia relief from the duty to be abolished as of 18 June 2015 on any transaction which occurs on or after that date, as if the legislative amendments has been passed into law.


Abolition Of Duty On Non-Real Property


With effect from 18 June 2015, duty on conveyances of non-real property has been abolished. This means that transfers of items such as goodwill, intellectual property, receivables, statutory licences, plant and equipment (other than fixtures) not conveyed with land, and other chattels and business assets will no longer be dutiable.


Abolition Of Duty On Shares And Units


With effect from 18 June 2015, duty on conveyances of non-quoted marketable securities has been abolished. The abolition of that duty does not remove the duty payable on a contract of sale of marketable securities entered into prior to 18 June 2015.


From 1 July 2018, duty on the issue, redemption and transfer of units in a unit trust will be abolished.


Landholder duty will continue to apply as outlined below.


Phased Abolition Of Duty On Land Other Than Residential Or Primary Production Land


Duty on conveyances of land other than residential or primary production land, will be phased out over three years. Duty rates are expected to be reduced by one third on 1 July 2016, by a further third on 1 July 2017, and abolished completely as of 1 July 2018.


Whether land is classified as residential or primary production land will be determined by the Commissioner on the basis of a number of criteria, including zoning, predominant usage, permitted use and coding by the Valuer General. Exemptions which currently apply in relation to primary production land will continue to apply.


Changes To Landholder Duty


Landholder duty will continue to apply to relevant acquisitions of landholding entities. However, as duty on land other than residential or primary production land is phased out, many entities will cease to be classified as landholders for the purposes of the Act, or their landholdings included within the duty base will be significantly narrowed.


As landholder duty will only apply to relevant acquisitions in entities holding South Australian residential and primary production land from 1 July 2018, the landholder threshold (currently $1 million) will also be abolished as of that date.


Expansion Of Corporate Reconstruction Relief


Corporate reconstruction relief, which is currently administered on an ex gratia basis in South Australia, will legislated with the addition of a new Part 4AA of the Act. In the new Information Circular 75, released on 18 June 2015, RevenueSA announced that the availability of relief will be expanded by removal of the following eligibility requirements:


  • that ‘substantially all’ the property of the transferor be transferred to another group member,
  • that transferor and transferee have been part of the same corporate group for at least three years, and that the transferred assets remain within the group for a further three years,
  • that the ultimate parent of the group not be trustee of a discretionary trust.


Information Circular 75 further advises that, for transactions completed on or after 18 June 2015, corporate reconstruction relief will be granted where the transaction would qualify for relief under the provisions of the proposed Part 4AA. However, we note that the provisions of the amending Bill do not appear entirely consistent with the changes announced in the Circular, and so caution is warranted. We note that, although RevenueSA has announced an expansion of the availability of relief, the proposed wording of the Bill would, on one view, narrow the definition of a corporate group by comparison to the present ex gratia rules.


Other Revenue Amendments


Further proposed amendments include:


  • Clarification that the value of transferred property is to be assessed as at the date of transfer, not the date of contract (provisions to have retrospective effect, but interest and penalties to only be applied to instruments stamped on or after 18 June 2015),
  • Application of the s 71D concession to retention tenements,
  • Legislation of the charitable exemption requirements,
  • Miscellaneous amendments to duty exemptions relating to transactions involving families, incapacitated persons, disabled beneficiaries and disability service providers.


RevenueSA has issued guidance on the new amendments, including how corporate reconstruction relief will be administered for reconstruction transactions taking place on or after 18 June 2015.


New South Wales


The New South Wales Budget for 2015-16 maintains previously announced commitments to abolish mortgage duty and transfer duty on non-real business assets, shares, units in a unit trust, statutory licenses and permissions, gaming machine entitlements, and commercial fishery shares as of 1 July 2016.


herbert smith Freehills


For further information, please contact:


Richard Giannone, Partner, Herbert Smith Freehills

[email protected]


Jinny Chaimungkalanont, Partner, Herbert Smith Freehills

[email protected]


Nick Heggart, Director, Greenwoods & Herbert Smith Freehills

[email protected]


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