In brief - Act makes changes to duties, land tax and
On Tuesday 14 October 2014, the State Revenue Legislation Further Amendment Bill 2014
(NSW) was passed by the Legislative Council and assented to on
23 October 2014. The State Revenue Legislation Further
Amendment Act ("the Act") is part of an ongoing
government initiative to respond promptly to protect the
state's tax revenues and to ensure that tax liabilities can be
clearly identified and operate fairly. In particular, the Act makes
amendments to duties, land tax and payroll.
Duties Act 1997 (NSW) amended to prevent avoidance
to prevent avoidance practices by imposing duty on certain
transactions involving options to purchase land;
to prevent avoidance practices by imposing duty on the novation
of an agreement for lease of land; and
to make further provisions for duty payable on transactions
involving self-managed superannuation funds.
The amendments to the Duties Act took effect on 23
October 2014, the date of assent of the State Revenue
Legislation Further Amendment Act 2014 (NSW).
Acquisition of options to purchase land to be subject to
The Act makes changes to the duty treatment of options to
purchase land and ensures that the acquisition of an option by a
third party is subject to transfer duty, regardless of the form of
the transaction. This means that options to purchase land will be
dutiable in the same way as a transfer of an option to purchase
The Act provides that a transfer of an option to purchase land
is taken to occur if, for valuable consideration:
another person is nominated to exercise the option; or
another person is nominated as purchaser or transferee of the
land the subject of the option on or before the exercise of the
the option holder agrees to a novation of the option, or
otherwise relinquishes rights under the option so that another
person obtains a right to exercise the option or to purchase the
Duty to be imposed on change of ownership of option to purchase
In calculating the consideration for a transfer of land that
occurs as a consequence of the exercise of an option to purchase,
the Office of State Revenue will take into account the amount or
value of the consideration provided by or on behalf of the
transferee for the option (whether for its grant, transfer,
exercise, relinquishment, novation or otherwise).
Where duty is chargeable on a transfer of land that occurs as a
consequence of the exercise of an option to purchase, the amount of
duty payable is to be reduced by the amount of duty (if any) paid
by the transferee on the transfer of the option to the
These amendments to the Duties Act are consistent with
the policy of imposing duty on the change of ownership of options
and will apply to options granted and transferred on or after the
commencement date of the provisions.
Duty to be imposed on novation of agreement for lease of
The Act imposes duty on the novation of an agreement for lease
of land as if:
the lessee's interest in the agreement were dutiable
the novation of the agreement were a transfer of that dutiable
This amendment makes a new lessee liable for duty on the
novation of the agreement for lease and is intended to prevent the
avoidance of duty by ensuring that duty is payable where a lease is
novated, rather than transferred.
The Act increases the concessional rate of duty that applies
from $50 to $500 when a member of a self managed superannuation
fund transfers property to the trustee or a custodian of the
trustee of the fund.
The Act also imposes duty in the amount of $500 to be payable on
a declaration of trust by custodians of self managed superannuation
funds holding property on trust for the trustee of a named self
managed superannuation fund.
Parties to property related transactions should be aware of
changes introduced by Act
The Act makes significant changes to the duty treatment of
options to purchase land, novation of agreements for lease of land
and the duty payable with respect to property held on trust for the
trustee of a self managed superannuation fund.
Parties to property related transactions should take note of
such changes to ensure that they are aware of any stamp duty
implications they may be liable for, now that the State Revenue
Legislation Further Amendment Act 2014 (NSW) has commenced
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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