Australia: Proposed New South Wales stamp duty changes

An amending bill has been introduced into the New South Wales Parliament which will make significant stamp duty changes. Once enacted, some of the amendments may apply to transactions that have already been entered into.


The State Revenue Legislation Amendment Bill 2013 (Bill) will amend the Duties Act 1997 (NSW) (Act) to deem a transfer of an option to purchase land to occur in specified circumstances. This amendment is intended to overcome the recent Supreme Court decision in CTI Joint Venture Company Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 20.

A dutiable transaction will arise if, for valuable consideration, an option holder (being the person who has a right to purchase land in New South Wales under an option):

  • nominates another person to exercise the option; or
  • nominates another person as purchaser or transferee of the land the subject of the option on or before the exercise of the option; or
  • agrees to a novation of the option or otherwise gives up their rights under the option so that another person obtains the right to purchase the land.

In addition, the Act will be amended so that the consideration for the transfer of land pursuant to the exercise of an option will be taken to include the consideration provided by the transferee for the option (whether for its grant, transfer, exercise or otherwise). However, the duty chargeable on the transfer of land will be reduced by the amount of any duty paid by the transferee on the transfer of the option to the transferee.

Application of the amendments

These amendments will commence on the later of 1 July 2013 and the date of Royal Assent. However, the amendments will extend to an option granted or transferred before the commencement date, and also to consideration provided for an option before the commencement date.


Removal of the "just and reasonable" exemption

The Bill will introduce two new landholder duty exemptions of a targeted nature that will apply in very limited circumstances. More importantly, the introduction of these exemptions will be accompanied by the removal of the general discretion of the Chief Commissioner to fully or partially exempt an acquisition from landholder duty in circumstances where he is satisfied that it would not be just and reasonable to impose duty.

Exploration licences, opal prospecting licences and assessment leases

In addition to a mining lease or mineral claim, the Bill will expand what is taken to be an interest in land to include an exploration licence or opal prospecting licence or assessment lease granted under the Mining Act 1992 (NSW). These additional mining tenements are already dutiable property as statutory licences and subject to transfer duty. However, this change will mean that they will also be landholdings for landholder duty purposes.

Removal of the primary producer concession

Currently, duty is only imposed on an acquisition of an interest in a primary producer (being a landholder that holds land used for primary production) if the primary producer is land rich and the value of its landholdings comprise 80% or more of the value of all its property. This concession will be removed so that the acquisition of an interest in a primary producer will be treated in the same way as the acquisition of an interest in any other landholder.

Application of the amendments

These amendments will commence on the later of 1 July 2013 and the date of Royal Assent. However, the amendments will not apply to an acquisition in a landholder that is made in conformity with an agreement first executed before the commencement date.


The Act will be amended so that the unencumbered value of an interest in land arising because of a mining tenement will be determined having regard to any information about the land, as if the information were an attribute of the land.


The Bill will also amend the Land Tax Management Act 1956 (NSW) to update the definition of rural land for the purposes of the primary production exemption in order to reflect changes in planning terminology.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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