On 18 June 2015, as part of the 2015-2016 South Australian Budget, the South Australian Government announced sweeping changes to the South Australian stamp duty regime.
Today the legislation giving effect to the proposed changes received royal assent.
Our original alert which summarised the main aspects of the proposed changes can be accessed here. The most significant change from the original announcements is that the timeframe for applying for corporate reconstruction relief in South Australia is extended from 12 months to 5 years after completion of the relevant transaction.
As a result of the amendments, South Australia no longer imposes duty on the conveyance of most kinds of personal property, including debts. A written agreement for the sale of a debt located in South Australia is therefore no longer subject to conveyance duty. Currently, many debt factoring, invoice discounting and securitisation arrangements are drafted so that the seller makes an offer to sell debts which the buyer may accept by conduct. As a result of that drafting, the buyer is not legally committed to the transaction because the buyer is not obliged to accept the offer.
It will now generally be possible to enter into a written agreement for the sale of debts located throughout Australia without incurring duty in any Australian State or Territory as long as the particular transaction satisfies the requirements of either the debt factoring exemption or a relevant securitisation exemption in Queensland.
The main changes to the South Australian stamp duty regime as a result of the new legislation are summarised below:
- on and from 18 June 2015:
- stamp duty on the transfer of non-quoted marketable securities; non-real property and units in unit trusts (except where the unit trusts hold land and certain goods in South Australia) is abolished; and
- corporate reconstruction relief will have modified criteria (including the removal of the previous post-transaction association requirements).
- between 1 July 2016 and 1 July 2018 stamp duty on the transfer of non-residential non-primary real property is to be phased out.
- on and from 1 July 2018:
- stamp duty on the transfers of units in a unit trust that holds land in South Australia and the transfers of mining licences and tenements will be abolished;
- the $1 million landholder threshold will be removed; and
- landholder duty is only to apply in relation to the acquisition of an interest in a company or trust that holds South Australian residential land or primary production land.
The above changes represent some of the most significant and sweeping changes to the stamp duty regime of a State or Territory in recent years and are intended to promote corporate investment into South Australia.