Queensland exploration permits and authorities will now
be subject to stamp duty, and the top rate of duty is also set to
increase - and both changes will be retrospective from 13 January
Changes to Queensland's exemption from stamp duty for
exploration permits were foreshadowed by the previous ALP State
Government in its mid-year fiscal statement on 13January 2012, but
it was unclear until now what the policy of the incoming Government
would be. The mining industry now has some clarity, with the
Government moving to bring exploration permits and authorities to
prospect into the stamp duty net via the Fiscal Repair Amendment
Historically, Queensland has had lower rates of stamp duty
– with a top marginal rate of 3.75% until a decade ago
– and (unlike other jurisdictions) has allowed an
exemption on the direct or indirect dealing in exploration
Exploration permits and landholder duty
Making this change has been comparatively simple. The definition
of "land" used to contain an exclusion in respect of
exploration permits. This will now be removed, although offshore
petroleum permits remain free of duty. As a result, not only will
the purchase of an exploration permit now be subject to duty on the
higher of consideration or value, but exploration permits will also
be treated as land when the shares in a company that holds them are
As a result, where 50% or more of the shares in a company which
owns mining tenements and other land in aggregate worth more than
$2million by market value, landholder duty will now apply.
In addition, things "fixed to the land" that may be
separately owned, whether or not they are owned by the landholder,
are now expressly included in the definition of "land".
The Government says this merely clarifies the old law which was
confused following a WA landholder decision. This will now bring
within the duty net chattels affixed to the land but owned by
another party. As a result, in some cases it may be cheaper to
transfer the land (or an interest in it) rather than shares in a
company that owns the land.
There is a Budget proposal to introduce a "farm-in"
exemption in relation to dealing in exploration permits, which
presumably will only apply to direct transfers. The scope of this
exemption remains to be seen, and is not contained in the Bill.
While there was speculation that the previous Government's
change of the classification of exploration permits would be
accepted by the new Government, it was hoped that the change would
not be made retrospective to the 13January 2012 date that had
previously been announced.
In the end the retrospective element has been included and the
changes will be effective as from 13 January 2012. The largest
section of the Bill (insofar as it relates to the Duties Act) is
dedicated to inserting a suite of transitional provisions governing
dealings in exploration permits between 13January 2012 and the
Bill's eventual passage.
In short, unless there was a pre-existing agreement to acquire
at 13January 2012 (even if conditional), then such agreement is now
deemed to be dutiable and requiring lodgement or self assessment
within 30days of the date of royal assent to the Fiscal Repair
Bill. This regime will apply for both landholder duty and transfer
duty purposes – and it is not beyond the realms of
possibility that some taxpayers may be unaware that they have made
a "relevant acquisition" for landholder duty purposes so
as to attract duty at all.
Entities and their advisers will need to conduct a thorough
survey of the transactions entered into as from 13January 2012 to
establish whether there will be a duty liability.
New stamp duty rates
Not only will more transactions now be dutiable, the new rates
of duty that will have effect as from the Bill's passage will
also apply to transactions within the transitional period. The most
relevant is the new rate that applies at 5.75% to the extent that
consideration or value exceeds $1million, added to the $38,025
payable on a consideration of $1million.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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