New South Wales Treasurer Daniel Mookhey after delaying the 2023-24 budget has today (19 September 2023) handed down the new Labor Government's first budget with significant changes being made to the state taxes landscape in New South Wales. The new revenue measures are expected to lead to an increase in revenue of almost $1b over four years.

With the New South Wales budget now delivered, this brings budget season to a close across the States and Territories. See our article below which summarises the key changes across the jurisdictions (and our original posts here and here).

New South Wales

Stamp Duty Budget Reforms

The key reforms to be introduced under the Treasury and Revenue Legislation Amendment Bill 2023 (NSW) include:

  • Corporate Reconstruction / Consolidation Relief: the previous total exemption from duty for a corporate reconstruction or consolidation transaction is to be replaced with a 90% concession. This change will give rise to significantly greater complexity for internal restructures and, for the first time, comprehensive valuation evidence may be required for assets involved in a corporate restructure leading to further barrier for internal restructures.

    This reform is similar to the Victorian approach with some key differences, including there being no concession if a corporate restructure involves the transfer of the same asset multiple times. In Victoria, there is a crediting provision designed to ensure that a multiple step restructure does not result in double duty on the same asset.

    The new regime will apply to transactions that occur on or after 1 February 2024. The transitional provisions provide an exception for transactions that arise from an agreement or arrangement entered before the amending legislation was introduced to Parliament (i.e. 19 September 2023) and for which an exemption application is lodged on or before 1 April 2024 and is approved. In these circumstances, the full exemption will continue to be available.
  • 20% Threshold for Private Unit Trust Schemes: Under the existing regime, no duty is payable on the acquisition of an interest of less than 50% (subject to aggregation rules) in a unit trust scheme which holds land with a value of $2m or more. This is proposed to be reduced to a 20% threshold and a new regime will be introduced for registered wholesale unit trusts which will restore the 50% threshold for those registered trusts.

    This change brings New South Wales in line with the treatment of private trusts in Victoria (and reverts back to the NSW regime in place under the former land rich rules before 1 July 2009, when the 20% threshold applied to a private trust). This is a significant change and will give rise to complexity in the management of unit trusts in New South Wales, particularly those established based on the then applicable 50% threshold.

    The new regime will apply to transactions that occur on or after 1 February 2024. The transitional provisions provide an exception for transactions that arise from an agreement or arrangement entered before 19 September 2023.
  • Linked Entity (Tracing) Rules: in the similar vein to the new threshold for private unit trust schemes, it is also proposed that the threshold for the application of the linked entities rules will be reduced from 50% to 20%. This means that an entity (the First Entity) which holds an interest of 20% or more (rather than 50% or more) in another entity will be deemed to hold a proportionate interest of that other entity's landholdings. This may mean that a share or unit transaction in the First Entity will attract duty by reference to this indirect interest.

    The changes are significant that many entities will become landholders for the first time. It will be critical to revisit existing structures to ensure the duty implications of future transactions are properly understood.
  • Wholesale Unit Trust Registration: to mitigate the impact on wholesale investors, unit trusts will be able to register as wholesale unit trusts which will restore the 50% threshold for the imposition of duty. In broad terms, a trust will be able to register where:
    • the trust was not established for a particular investor, and
    • not less than 80% of the units in the trust are held by qualified investors, and
    • no qualified investor, either alone or together with associated persons, holds 50% or more of the units in the trust, and
    • the trust satisfies additional requirements that are specified by the Chief Commissioner.
    • The list of qualifying investors is extensive (and broadly the same as the Victorian definition) and includes superannuation funds, listed entities, life companies, the Crown (and statutory bodies representing the Crown), trustees of other wholesale unit trust schemes, listed companies / trusts and certain custodians.

The requirements for registration, at least at present noting the Chief Commissioner can issue further requirements, are less stringent than those that exist under the Victorian wholesale unit trust regime and it is likely a broader category of unit trusts will be able to register.

There is also a "start-up" regime to register as an imminent wholesale unit trust scheme which will confer the same benefits for a 12 month period provided that the Chief Commissioner is satisfied the trust will become a wholesale unit trust scheme within 12 months after the day on which the first units in the scheme are issued to a qualifying investor.

The registration will also be able to be revoked if a disqualifying circumstance occurs (i.e. where the unit trust would cease to be able to be registered as a wholesale unit trust or another condition imposed on registration is breached). Where revoked the trust will be treated as a private unit trust from the date the disqualifying event occurred.

The trustee for a unit trust scheme that is registered must give the Chief Commissioner written notice of a disqualifying circumstance within 28 days after it occurs otherwise significant penalties apply (up to $55,000).

  • Increase in Nominal Duty: many transactions presently attract nominal duty (e.g. $10, $50, or $500). The proposed reforms involve in some cases a doubling of the nominal duty payable. Key changes to note are a transfer in conformity with a contract will now attract $20 duty (rather than $10) and a declaration of trust over non-dutiable or unidentified property will attract $750 duty (rather than $500).

The increase in duty applies from 1 February 2024. The transitional provisions provide an exception for a transfer pursuant to an agreement or arrangement entered into before 1 February 2024.

Other Reforms

Other reforms to other State tax measures include:

  • Electric Vehicles: The exemption from motor vehicle registration duty ceases to be available to zero and low emission vehicles from 1 January 2024. The transitional provisions allow battery electric vehicles and hydrogen fuel cell electric vehicles purchased (or for which a deposit was paid) before 1 January 2024 but that had not yet been registered by that date to continue to access the exemption.

    A road user charge will apply to certain zero or low emissions vehicles from 1 January 2024.
  • Remission of Interest: Interest is presently imposed on the late payment of duty (at the sum of both a market rate (presently 3.9% and a premium rate (8%)). A new regime has been proposed for the remission of interest, whereby the Chief Commissioner will be empowered to issue guidelines for the remission of interest and interest will only able to be remitted in accordance with those guidelines. This change to give the Chief Commissioner's guidelines statutory force also enables the Chief Commissioner to overcome existing Court / Tribunal decisions which prescribe the circumstances where interest should be remitted.

    It is possible that the future guidelines will place less weight on a taxpayer making a voluntary disclosure in advance of investigation than has been the approach taken by the Court to date given the Commissioner's broader views in the existing non-binding practice note: CPN 024: Interest and penalty tax guidelines Cf: Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773; (2018) 108 ATR 63 at [81].
  • Land Tax (Principal Place of Residence): Land may presently be eligible for the principal place of residence exemption from land tax where one of multiple owners occupies the property as their principal place of residence. This is the case even where the relevant occupier owns a very small proportion of the total property. The reforms provide that in order to be eligible for the exemption, all the persons who use and occupy the land as a principal place of residence must together own at least a 25% interest in the land. This applies from the 2026 land tax year
  • Coal Royalties: an increase in coal royalty rates by 2.6%, effective from 1 July 2024:
    • For open cut coal – an increase from 8.2% to 10.8%
    • For underground coal – from 7.2% to 9.8%, and
    • For deep underground coal – from 6.2% to 8.8%.

A guide to the proposed amendments has also been released by Revenue NSW.


Annual property tax to replace stamp duty on commercial and residential properties

Significant Victorian stamp duty changes were announced as part of the Victorian Budget for 2023-24. Under the proposed changes, when commercial and industrial properties are first sold on or after 1 July 2024, that 'first purchaser' will be able to choose to:

  • pay the property's final duty liability as an upfront lump sum; or
  • pay fixed duty instalments over 10 years (plus interest).

The new annual property tax (set at 1% of the property's unimproved land value) will become payable on a property after a 10 year transitional period, which begins on the date of the first disposal of the property on or after 1 July 2024 (meaning that the earliest date on which the new tax could become payable is 1 July 2034).

Once a property has transitioned to the new system, duty will no longer be payable on a sale of that property.

The changes will not apply to owners of industrial or commercial property who acquire their interest before 1 July 2024.

The Bill that will implement the annual property tax has not yet been released. The budget papers indicate that further announcements are to be made by the end of 2023. We will provide a further update when the Bill is released.

There are many unanswered questions:

  • It is not clear what the 'trigger event' will include, to bring relevant property into the property tax regime: for example, where properties are transferred after 1 July 2024 under a corporate reconstruction or a change of trustee concession, become subject to an economic entitlement arrangement, or where a landholder duty acquisition occurs.
  • Query the position of the first purchaser after 1 July 2024, who will effectively pay duty as well as the annual property tax after a 10 year transitional period.
  • The treatment of commercial residential properties will also need to be considered.
  • The extent to which landholder duty will continue to apply to acquisitions in landholding companies and unit trust schemes which hold landholdings which are either wholly or partly subject to the new annual property tax.
  • Finally, whether the new annual property tax will ultimately be expanded to include residential property remains to be seen. Given that duty revenues are forecast to rise by 8.4% per year over the forward estimates,1 and the government's focus on reducing debt incurred during the height of the COVID pandemic by 2033, it may be some time before we see changes to residential duty.

Other changes

The government also announced the following state revenue measures:

  • Doubling of land tax absentee owner surcharge rate: From 1 January 2024, the land tax absentee owner surcharge will be increased. The surcharge rate will increase from 2% to 4%, and the tax-free threshold for non-trust absentee owners will decrease from $300,000 to $50,000. This will align Victorian and New South Wales rates.
  • Land tax: As part of the COVID Debt Levy, from 1 January 2024, the tax-free threshold for general land tax rates will decrease from $300,000 to $50,000. A temporary fixed charge of $500 will be levied on taxpayers with landholdings with taxable values of $50,000 to $100,000, and a temporary fixed charge of $975 will apply to taxpayers with landholdings with taxable values of $100,000 to $300,000. For general taxpayers with property holdings with taxable values of above $300,000 (and trust taxpayers with property holdings with taxable values of above $250,000), land tax rates will temporarily increase by $975 plus 0.1% of the taxable value of their landholdings above $300,000. This applies until 30 June 2033.
  • Payroll tax: From 1 July 2024, the payroll tax free threshold will be lifted from $700,000 to $900,000, and from 1 July 2025, the tax-free threshold will be lifted to $1 million.
  • As part of the COVID Debt Levy, from 1 July 2023, employers with national payrolls above $10 million per year will pay additional payroll tax. A rate of 0.5% will apply for employers with national payrolls above $10 million, and employers with national payrolls above $100 million will pay an additional 0.5%. The additional rates will be paid on the Victorian share of wages above the relevant threshold. This levy will apply until 30 June 2033.
  • In addition, also from 1 July 2024:
    • the tax free threshold will 'phase out'. This will result in the tax-free amount reducing for each dollar an employer pays in wages over $3 million. Employers with wages over $5 million will not benefit from the tax-free threshold; and
    • approximately 110 non-government schools will lose their payroll tax exemption.
  • Business insurance duty abolished: Business insurance duty (which applies to public and product liability, professional indemnity, employers' liability, fire and industrial special risks, and marine and aviation insurance) will be abolished. This will occur over a 10 year period. The duty will be abolished by 2033, with the rate of duty, currently 10%, being reduced by 1% each year from 1 July 2024. Victoria has already abolished insurance duty on life insurance.

Queensland & South Australia

The Queensland and South Australian Budgets for 2023-24 saw the introduction of significant concessions for eligible build to rent developments demonstrating the importance of this asset class in tackling the national housing crisis.

In Queensland the new concession will provide a 50% reduction to the taxable land value on which the development is constructed for the purpose of calculating land tax, along with a complete waiver of foreign surcharge rate of land tax where the owner is a "foreign person". There is also an exemption form additional foreign acquirer duty where land is acquired for an eligible build to rent development.

In South Australia the concession is more limited and will only provide a 50% reduction to the land on which the development is constructed for the purpose of calculating land tax (noting that foreign surcharge land tax is not levied in South Australia).


No significant state tax reform was announced as part of the Tasmania Budget for 2023-24.

Western Australia

The Western Australian Budget for 2023-24 continued to deliver a strong fiscal result with a $3.3b surplus. No significant state tax reform was announced as part of the budget.

In the week following the budget, the Western Australian government introduced the long awaited Land Tax Assessment Amendment (Build-to-Rent) Bill 2023 (WA) into Parliament (this reform was first proposed in last year's budget – see our note here). The proposed concession bears strong similarities to the existing build to rent land tax concession in Victoria. To qualify for the exemption, which if the bill is passed will be available from the 2023-24 assessment year, a development must:

  • contain at least 40 self-contained dwellings available for residential leases;
  • be owned by the same owner or group of owners, and be managed by the same management entity; and
  • be completed between 12 May 2022 and 1 July 2032.

We will provide a further update on the build to rent land tax concession as the legislation proceeds through the Western Australian parliament.

Northern Territory

Coinciding with the Federal Budget, the Northern Territory was the first of the States and Territories to deliver its FY2023-24 budget. The NT budget brings significant red tape reduction to businesses with a connection to the Territory, with the abolition of stamp duty on the conveyance of non-land property, except for chattels conveyed with an interest in land. NT stamp duty will also be abolished on chattels conveyed with a lease that has nil or nominal dutiable value.

The Stamp Duty Amendment Bill 2023 (NT) was introduced to the NT Parliament this morning and will bring significant changes to the imposition of stamp duty in the Territory. The key changes include:

  • Business Sale Duty: Largely abolishing stamp duty on business sale agreements by removing from the definition of dutiable property:
  • goodwill;
  • business names, trading names, and trade marks;
  • rights to use things, systems and processes in the Territory that are the subject of a patent, a registered design, or copyright;
  • information and technical knowledge connected with a business undertaking in the Territory;
  • patents, registered designs, and copyright;
  • Commonwealth or Territory statutory licenses or permissions (noting that mining tenements and petroleum interests remain subject to duty as part of the extended definition of land).

These changes will result in a significant red tap reduction as it is quite common in the case of large scale business transactions for there to be a limited connection to the Territory which could give rise to a lodgement obligations. It will also mean that certain IP and trade mark transactions (e.g. the grant or transfer of an IP licence in respect of a NT business) will not be chargeable with duty.

It is clear that the administrative burden both on the Territory Revenue Office and on taxpayers far exceeded the revenue derived with the anticipated budgetary impact of this change to result in revenue forgone of $3 million per annum from 2023-24.

The changes also extend to abolishing duty on franchising arrangements.

  • Exemptions for Chattels Only Transactions: Introducing a new exemption from stamp duty so that the transfer of chattels in the Territory will not be subject to duty if the only other dutiable property the subject of the same transaction is a conveyance or grant of a lease, or an interest in a lease, for nil or only nominal dutiable value.

    The inclusion of this exemption will ensure that duty is only imposed on the transfer of chattels in the Territory if a substantive interest in land / an option to purchase land is also conveyed / granted.

    Duty should not be payable on the usual acquisition of a business, where the only land interest is a lease on usual commercial terms and the lease has nil or nominal dutiable value.
  • Grant of Resource Interests: Clarifying the exemption from duty on the grant of a "resource interest" (being, a mining tenement or a petroleum interest (both further defined terms)) so that duty is not payable where the grant of a resource interest occurs unless, in the opinion of the Commissioner, the grant forms part of a wider transaction amounting in effect to a transfer of the resource interest.
  • Surrenders of Property: Confirming that certain surrenders of property will continue to be subject to duty. For example, the surrender of an easement in order to allow the same easement, or a substantially similar easement, to be granted to a third person will continue to be subject to duty.

    If ultimately passed, the changes will be deemed to take effect from 9 May 2023.

    These changes bring the NT in line with most other jurisdictions which have abolished duty on non-land business assets. Such duty remains payable only in Queensland and Western Australia.


1 Noting that duty revenues are estimated to have accounted for 26.5% of the government's total taxation receipts for 2022-2023.

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