We take this opportunity to remind everyone that as and from 1 July 2016, the following duties were abolished in New South Wales:

1. Mortgage Duty;
2. Marketable Securities Duty; and
3. Business Assets Duty.

Mortgage Duty

Mortgage duty has been abolished on and from 1 July 2016 – at last! The effect of this is that mortgages executed and advances made on or after 1 July 2016 will not be liable to duty. Where a mortgage is executed before 1 July 2016 but the initial advance is made on or after 1 July 2016 then duty of $5 is payable. Further, no duty is payable on collateral mortgages, refinancing mortgages or mortgages which form party of a multi-state mortgage package first executed on or after 1 July 2016.

Duty may still be payable on caveats in respect of unregistered mortgages subject to the date the unregistered mortgage is first executed.

Business Assets Duty

On and from 1 July 2016, the following types of property are no longer ‘dutiable property’ for the purposes of section 11 of the Duties Act 1997 (NSW):

1. A ‘business asset’, being:
   1. The goodwill of a business, if the business has supplied in NSW, or provided services in NSW, to a customer of the business;
   2. Intellectual property that has been used or exploited in NSW; or
   3. A statutory licence or permission under a Commonwealth law (if the rights under the licence have been exercised in NSW;
2. A gaming machine entitlement within the meaning of the Gaming Machines Act 2001 (NSW); and
3. A statutory licence or permission under a NSW law.

Ordinarily, a transaction may involve a transfer of one of the above types of property in conjunction with other dutiable property (i.e. land and interest in land and / or goods in NSW). The effect of the abolitions mean that duty may still be payable on other parts of the transaction but duty is not payable on the value of the above types of property.

Marketable Securities

On and from 1 July 2016, the following types of property cease to be ‘dutiable property’ for the purposes of section 11 of the Duties Act 1997 (NSW):

1. Shares in a NSW company and shares in a corporation incorporated outside Australia that are kept on an Australian register held in NSW; and
2. Units in a unit trust scheme, being units registered on a register held in NSW, or that are not registered on a register kept in Australia, but in respect of which the manager (or the trustee) of the scheme is a NSW company or person residing in NSW.

Agreements for the sale or transfer of shares / units executed on or after 1 July 2016 do not need to be stamped. Where an agreement for the sale of shares is executed prior to 1 July 2016 but the transfer form is not executed until 1 July 2016 or after, duty is payable on the agreement only and not the transfer.

While marketable security duty has been abolished, it is important to remember that landholder duty may still be applicable to the transaction. A landholder is a unit trust scheme, a listed company or a private company that has land holdings in NSW with an unencumbered value of $2 million or more. Where the transaction relates to the purchase of shares or units in a landholder, landholder duty may still be applicable. Similarly, duty on transactions involving company title dwellings and land use entitles will still apply.

We otherwise note duty on shares and units quoted on the ASX was abolished in July 2001.

For more information, please contact us.