NSW legislative amendments

The State Revenue Legislation Amendment Bill 2017 (NSW) has passed the New South Wales (NSW) Legislative Assembly and will now proceed to the NSW Legislative Council. The Bill makes various amendments to the Duties Act 1997 (NSW), Land Tax Management Act 1956 (NSW), and the Payroll Tax Act 2007 (NSW). 

The State Revenue Legislation Amendment Bill 2017 (NSW) has passed the New South Wales (NSW) Legislative Assembly and will now proceed to the NSW Legislative Council. The Bill makes various amendments to the Duties Act 1997 (NSW), Land Tax Management Act 1956 (NSW), and the Payroll Tax Act 2007 (NSW).

In relation to duty, the Bill proposes a number of amendments to improve the effectiveness of landholder duty provisions, including measures to improve the integrity of the provisions, and in some cases increase the level of consistency with other jurisdictions. The Bill also strengthens the duties general anti-avoidance provisions and to clarify the administration arrangements for assessment of electronic documents.

The Bill also includes a provision to better make lessees aware of their potential land tax liabilities.

NSW Revenue Ruling on application of foreign person surcharges to discretionary trusts

The NSW Office of State Revenue has released Revenue Ruling No. G 010: Surcharge Land Tax and Duty – Discretionary Trusts. A discretionary trust may be liable for duties and land tax surcharges on foreign persons if any potential beneficiary is a foreign person. This ruling indicates that the surcharge legislation is to be administered on the basis that the Chief Commissioner has discretion to exempt a trustee of a discretionary trust from surcharge purchaser duty and/or surcharge land tax if satisfied that the trustee is not involved in a scheme or arrangement for the evasion or avoidance of these taxes. Furthermore, within six months after granting the exemption, the trust deed must be amended so that the trustee is no longer liable for the taxes. If the trust deed is not amended within the required timeframe, the exemption will be rescinded with retrospective effect.

This Ruling is to operate with retrospective effect from 21 June 2016, until retrospective legislation is passed to confirm the concession.

WA State Administrative Tribunal finds duty applied to deeds executed on windup of partnership

In Rojoda Pty Ltd V Commissioner of State Revenue [2017] WASAT 35, the Western Australia State Administrative Tribunal has affirmed the decision and assessment of duty by the Commissioner of State Revenue on deeds executed in relation to winding up two partnerships. The Tribunal found that the deeds were new declarations of trust which created new equitable interests in the relevant properties, and therefore attracted duty. The Tribunal also rejected the applicant’s argument that a reduction of duty should be allowed under section 78 of the Duties Act 2008 (WA).

Victoria to address housing affordability

New measures were announced by the Victorian Government to address housing affordability. This includes the abolition of stamp duty for first home buyers for purchases of both new and established TaxTalk Monthly April 2017 PwC 8 homes below $600,000, with a concession available for homes valued between $600,000 and $750,000; removal of off-the-plan stamp duty concessions on investment properties; and the introduction of a new tax for ‘vacant’ dwellings. In addition, the Victorian Government has announced two new ‘shared equity’ programs that aim to assist first home owners get into the property market. This TaxTalk Alert considers the proposed changes in detail.