Mortgage duty is set to be abolished on 1 July 2012. New South
Wales is the only Australian state yet to abolish the tax on
secured lending arrangements.
Mortgage duty was originally scheduled to be abolished in NSW on
1 January 2011 in return for the state government's share of
GST revenue, but in 2007 the NSW Treasurer, The Hon. Michael Costa
MLC announced measures to bring forward the abolition to 1 July
2009. That date was embedded into the Duties Act by
amending legislation. However, in November 2008, the NSW Treasurer
The Hon. Eric Roozendaal MLC released a mini budget announcing that
the abolition of mortgage duty would be deferred until 1 July 2012.
The Duties Act was then amended to state unequivocally that
mortgage duty is abolished on and from 1 July 2012.
Absent any 11th hour announcement when the current NSW
Treasurer, The Hon. Mike Baird MP releases the state's budget
on 12 June 2012, mortgage duty will not be charged on advances, or
further advances, made after 1 July 2012 even if the mortgage was
executed before that date.
A liability for duty should still arise if, prior to 1 July
2012, the amount secured by a mortgage exceeds the amount for which
it is stamped. This is important where finance facilities
contemplate progressive draw-downs. During the lead up to 1 July,
stamping based on actual advances may be preferred where draw-down
levels will increase after mortgage duty is finally abolished.
The Northern Territory Government delivered its budget on 1 May
2012. The budget speech says:
"Like other jurisdictions the Territory Government will
defer abolition of stamp duty on non-land business property
including goodwill, licences and intellectual property, previously
scheduled for 1 July 2012, until budget situations
The NSW Government will not release its budget until 12 June and
we may not know until then whether it will follow suit by deferring
the abolition of duties.
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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