All State and Territory budgets have now been released and South Australia is the clear winner for significant changes, particularly for stamp duty.
In this Alert, Partner Justin Byrne and Senior Associate Rosalie Cattermole provide a snapshot of the key stamp duty announcements made in the various State and Territory budgets.
Transfers of non-listed shares
Stamp duty on non-quoted marketable securities (share duty) will be abolished in South Australia from 18 June 2015.
New South Wales
This leaves New South Wales as the only jurisdiction in Australia that will continue to charge duty on the transfer of non-listed shares (excluding the landholder and land rich regimes). The good news is that duty on the transfer of non-listed shares in a New South Wales company is proposed to be abolished from 1 July 2016.*
*Landholder duty and land rich duty may be imposed with reference to a transfer of shares in a listed or non-listed company in various Australian jurisdictions.
Transfers of non-real property
Stamp duty on transfers of non-real property will be abolished in South Australia from 18 June 2015. Non-real property comprises property that is not land and buildings, such as plants or equipment that is not fixed to land, goodwill, intellectual property and receivables.
However, until 1 July 2018, with some exceptions (such as for trading stock and livestock), stamp duty may still be charged on the transfer of goods in South Australia if the goods:
- are the subject of a transaction involving the conveyance or transfer of land for which duty is payable; and
- the goods have “a significant connection with the land” (referred to as “prescribed goods”).
The Commissioner will have discretion to determine that specified goods or specified classes of goods are not taken to be “prescribed goods”.
New South Wales
The New South Wales Government remains committed to the abolition of transfer duty on non-real property business assets from 1 July 2016.
Transfers of non-residential and non-primary production real property
Stamp duty on transfers of non-residential, non-primary production real property will be phased out over a three year period commencing 1 July 2016. Duty rates will be reduced by one-third from 1 July 2016, a further third from 1 July 2017, and from 1 July 2018 stamp duty will be abolished.
From 1 July 2018, stamp duty will continue to be charged on the transfer of residential and primary production land, although a stamp duty exemption may be available for the transfer of primary production land between family members (as is the case in other Australian jurisdictions).
Transfers of mining tenements
Stamp duty will be abolished on the transfer of mining tenements in South Australia from 1 July 2018.
Until then, stamp duty will continue to be charged on the transfer of an estate or interest in a mining tenement, including a lease or licence granted under the Mining Act 1971 (SA), as such interests will be taken to be “land”. The reduced duty rates for non-residential, non-primary production real property to apply from 1 July 2016 will apply to the transfer of mining tenements and licences. From 1 July 2016, the duty rates for the transfer of mining tenements and licences will be reduced by one-third and a further third from 1 July 2017 until the abolition of stamp duty on the transfer of mining tenements and licences from 1 July 2018.
In addition, the current concession for transfers of exploration tenements or an interest in an exploration tenement will be expanded to also provide concessional stamp duty treatment to the transfer of a retention tenement.
Although not a 2015 Budget measure, amendments were recently made to the Duties Act 2001 (Qld) to give legislative effect to transfer duty concessions for farm-in agreements in the mining sector. The new provisions in Chapter 2, Part 8A of the Act operate retrospectively to 10.30am on 13 January 2012.
New South Wales
Although not a 2015 Budget measure, transfer duty on statutory licences or permissions which include an exploration licence, will be abolished from 1 July 2016. Transfers of a mining lease or a mineral claim granted under the Mining Act 1992 (NSW) will continue to be subject to duty as interests in land under the Duties Act 1997 (NSW).
Corporate reconstruction duty relief – South Australia
The corporate reconstruction duty exemption previously only available in South Australia on an ex gratia basis from the Treasurer (see Circular No. 227), will have legislative effect from 18 June 2015. A new Part 4AA will be incorporated in the Stamp Duties Act 1923 (SA) and will expand upon the ex gratia relief currently available.
For the transfer of assets between members of a corporate group, there will no longer be a requirement for “substantially all of the assets of a corporation” to be transferred for the transaction to be eligible for the stamp duty relief. This is a significant and very welcome change from the requirements of the current regime.
In addition, the following current requirements will be abolished under the new legislative regime:
- The transferor and transferee corporations to remain members of the corporate group for a minimum of three years after the transaction (with some exceptions)
- For the assets to remain within the ownership of the corporate group for three years after the transaction.
An application for exemption must be made at any time before, or within one year after, the completion of the transaction to which the application relates.
Landholder duty – South Australia
Currently in South Australia the landholder duty regime applies to a company or unit trust with underlying land assets in South Australia of $1million or more. The $1million threshold will be removed from 1 July 2018 to coincide with the abolition of stamp duty on non-residential, non-primary production real property transfers. This means that from 1 July 2018, landholder duty will only apply where control of an entity holding South Australian residential and/or primary production land changes. This is a welcome change.
Transfers of units in a unit trust – South Australia
The South Australian Government has also announced that:
- from 1 July 2018, stamp duty on the issue, redemption and transfer of units in a private (or non-listed) unit trust will be abolished entirely; and
- from 1 July 2015, stamp duty will only be payable where the unit trust holds land in South Australia.
Have the stamp duty measures in South Australia become law?
The Bill to implement the various South Australian budget announcements was introduced in the House of Assembly on 18 June 2015. The proposed legislative amendments are subject to the Bill passing through Parliament and receiving Royal Assent. Parliament is due to sit again on 29 July 2015.