Uniformity of Stamp Duties

In 1994 New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territories launched what became known as 'the Rewrite Project' in an effort to simplify, modernize and unify Australian stamp duty law. Queensland has since indicated that it also intends to enact rewritten stamp duties legislation in 2001.

New South Wales was the first state to introduce new stamp duty legislation, namely the Duties Act 1997, which came into force on July 1 1998 (the NSW Act). Victoria has since followed suit with the Duties Act 2000, which replaced the Stamps Act 1958 as of July 1 2001. Uniformity has not been maintained because Victoria has now legislated to abolish the following:

• stamp duties on non-residential leases (effective immediately);
  
  
• stamp duties on unquoted marketable securities (effective July 1 2003); and
  
  
• stamp duties on mortgages (effective July 1 2004).

From Instrument Basis to Transaction Basis

Under the Duties Act an instrument relating to a dutiable transaction will still be liable for stamp duty but liability can also arise on transactions that are not, and never will be, evidenced in writing. Accordingly, while under the Stamps Act it was still technically possible, albeit difficult, to avoid liability for stamp duty by transferring land by way of oral agreements, all such arrangements will be dutiable under the Duties Act, as it creates an obligation for 'statements' in respect of transactions not evidenced by an instrument to be lodged with the State Revenue Office within three months of the transaction taking place.

Aggregation

The Duties Act provides that all the transfers of property relating to separate parcels of land and to parts of parcels of land (except farming land) will be aggregated and treated as a single transaction, if:

• they occur within 12 months of each other;
  
  
• the transfer is to the same person or an associated person; and
  
  
• the transactions give effect or amount to what is substantially one arrangement.

Assessment of Duty

Under the Stamps Act duty was calculated on whichever was greater out of the consideration under the stampable instrument and the market value of the property transferred as at the date of sale (generally, the date of the contract).

Under the Duties Act the dutiable value is whichever is the greater of the consideration under the dutiable transaction and the market value of the property as at the date of the dutiable transaction.

Cross-Border Transactions

The Duties Act and the NSW Act recognize that a large number of transactions cross state and territory borders. Both acts provide that the liability for duty in Victoria or New South Wales will arise only on the Victorian or New South Wales portion of the dutiable transaction respectively. This differs from other states where stamp duties are levied by those states if either the instrument relates to property in that state or the instrument is executed in that state.

For further information on this topic please contact Katerina Petrogiannakis or Toby Mittelman at Arnold Bloch Leibler by telephone (+61 3 9229 9779) or by fax (+61 3 9229 9889) or by e-mail ([email protected] or [email protected]).

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