How is duty charged?
What is dutiable under the Duties Act?
Is duty payable on share transfers, leases
or deeds?
Are there any benefits or concessions available
for first home buyers?
Is there an exemption from duty for the
transfer of a family farm?
Document Return System (DRS)
Further Information
The Duties Act 2000 charges duty on dutiable transactions occurring on or after 1 July 2001. Duties are administered in accordance with the Taxation Administration Act 1997.
Stamp duty is an old term used to describe duty charged on various instruments under the Stamps Act 1958. The Duties Act 2000 replaced the Stamps Act 1958 from 1 July 2001.
How is duty charged?
Depending on the nature of the transaction, duty is charged
at a flat rate, or at an ad valorem rate based on the value
of the transaction. Duties
rates
Please refer to the Evidentiary Requirements for Dutiable and Exempt Transactions publication for evidentiary requirements for the assessment of duty under the Duties Act 2000.
What is dutiable?
Land Transfers
The purchase of land, including buildings, attracts duty.
Unless an exemption applies, the transaction is charged with duty based
on the greater of:
(a) the market value of the property, or
(b) the consideration (price paid) – including
any GST.
Land Transfer Calculator
Water entitlements
Click here for duty treatment of land transferred with water entitlements.
Mirror Trusts / Cloned Trusts
The term ‘mirror trust’ is not defined in the Duties Act 2000. It is commonly understood that a ‘mirror trust’ refers to a new trust where the beneficiaries are the same as another trust (the original trust) and the terms of the both trusts have exactly the same meaning and effect. Mirror trusts are also sometimes referred to as ‘cloned trusts’. The terms are commonly used interchangeably.
A question may arise as to whether a transfer of dutiable property from an original trust to a new mirror trust is a dutiable transaction and is, therefore, subject to duty. Dutiable transaction is defined in section 7 of the Duties Act 2000 to include, among other things, a transfer of dutiable property.
Irrespective of how the new trust is described or constituted,
a transfer of dutiable property from an original trust to the new trust is
a dutiable transaction unless a specific exemption applies to the particular
facts of a matter. For example, a specific exemption under section
33 of the Duties Act 2000 (change in trustees exemption) may
apply if the transfer of dutiable property is solely because of the retirement
of a trustee or appointment of a new trustee, or other change in trustee.
However, the change in trustees exemption cannot apply to exempt a transfer to a new trustee where there is no pre-existing trust. This is because this exemption is specifically intended for a transfer of dutiable property made solely as a result of a change in the holder of the pre-existing office of trustee, and nothing more. As a mirror trust is a ‘new’ trust, the change in trustees exemption cannot apply to a transfer of dutiable property to a trustee of a mirror trust.
Declarations of Trust
A declarations of trust that does not declare a trust over land
attracts a duty of $200. A declaration of trust over land attracts duty at the
same rate as a land transfer.
Land Rich Acquisitions
Acquisitions of certain interests in land rich landholders are chargeable with duty at the rates applicable to land transfers. A land rich landholder is either a private company, a private unit trust scheme or a wholesale unit trust scheme that has land holdings in Victoria with an unencumbered value of $1,000,000 or more, and its land holdings in all places, whether within or outside Australia, comprise 60% or more of the unencumbered value of all its property.
Generally, land rich duty is not payable on interests acquired in public companies or public unit trust schemes, regardless of the value of those entities' land holdings. A person that has made a relevant acquisition in a land rich landholder is required to complete and lodge an acquisition statement and pay the duty payable within 3 months of the date of the relevant acquisition.
Click here for more information on land rich.
Motor Vehicle Duty
Duty is payable when registering or
transferring a motor vehicle in Victoria. If the vehicle
is purchased from a licensed motor car trader, the duty
is paid to the trader. If the vehicle is acquired from a
person who is not a licensed motor car trader, the duty
is paid by the acquirer to VicRoads.
The amount of duty payable is based
on the 'dutiable value' of the vehicle. Dutiable
value means the greater of:
(a) the consideration in money
(or money’s worth) given for the vehicle, or
(b) the price at which the vehicle might reasonably be
sold in the open market.
If GST is applicable, it forms part
of the consideration. The rates of duty depend on whether
the vehicle is a registered or unregistered (passenger or
non passenger) vehicle.
General Insurance
General insurance is any kind of insurance applicable to
Victorian property, risk, contingency or event. It includes
insurance for trauma and disabilities, but not life insurance.
Duty of 10% is charged on the gross premium and paid by
the insurer who usually passes the cost on to the insured.
Life Insurance
Life insurance is any insurance concerning a life or lives
of people living in Victoria when the policy is issued.
It does not include insurance against an accident. The amount
of duty is based on the premium paid for term and temporary
life insurance policies, and on the sum insured where the
life policy is not for a fixed term. The insurer is liable
but the cost is usually passed on to the insured.
Livestock sales
Duty is payable on the sale of cattle, sheep or goats -
or their carcases. If the sale is made through an Approved
Agent, the agent is liable to pay the duty but will usually
pass the cost on to the vendor. Duty on sales by Approved
Agents is paid to the State Revenue Office by way of a monthly
return. For all other sales, duty is payable by the vendor
by affixing cattle, sheep or goat duty stamps to the Statement
of Sale retained by the purchaser.
Hire of Goods
Hire of Goods was abolished from 1 January 2007. Businesses hiring out goods may be liable to pay duty. If
the income earned from hiring exceeds $6000 in any month,
the business is required to register with the SRO. Duty
is charged at a rate of 0.75% of the amount of income derived
from hiring that exceeds $6000.
Mortgages
Mortgages, or further advances, were charged with duty to 30 June 2004. The
rate was based on the amount borrowed. Mortgages with an
initial advance of between $0 and $10,000 were charged $4
duty. Where the initial advance was more than $10,000, the
duty was $4 plus $0.80 for every $200 or part thereof in
excess of the $10,000. Further advances to a mortgage attracted
duty of $0.80 for every $200 or part thereof of the amount
that exceeded the amount to which the mortgage is currently
stamped. The mortgagor was liable to pay the duty within
3 months of giving the mortgage or receiving the further
advance.
Mortgage duty was abolished from 1 July 2004. For further information please refer to Bulletin D1/04 - Abolition of Duty on Mortgages.
Is duty payable
on share transfers, leases or deeds?
No. Duty on transfers of listed (on the stock exchange) marketable securities (shares and units) was abolished from 1 July 2001, and duty on transfers of unlisted marketable securities was abolished from 1 July 2002. While marketable security duty is no longer payable on a transfer of unlisted shares or units, certain acquisitions may be chargeable with duty under the land rich provisions of the Duties Act 2000.
No duty has been charged on residential leases since 1985, and duty on commercial leases was removed from 26 April 2001. Deeds have not been dutiable since 30 April 1997.
Are there any benefits
or concessions available for first home buyers?
Yes. If you are a first home buyer with a family, or you
hold a concession card at the time you buy a home, you may
be eligible for a full or partial exemption from, or refund
of, the duty payable on the land transfer and mortgage.
The eligibility conditions are set out in the information
provided at benefits
for families and concession
card holders benefits.
Is there an
exemption from duty for the transfer of a family farm?
Yes. The transfer of all, or part, of a family farm may
be exempt from duty. The conditions are that:
- the property must be a certain class
of land and must be used for primary production;
- the transferor must be a natural person,
or a trustee for a natural person, or a company in which
all the shares are owned by related natural persons;
- the transferee must be a relative, or
a trustee of certain types of trust, or a shareholder
of the transferring company; and
- the transfer must not be part of a tax
avoidance scheme.
A family
farm exemption statutory declaration is required when
the transfer is lodged for stamping, along with a copy of
the duly stamped trust deed if a trust is involved. More
information about the conditions is available on this
site.
What is the Document Return System (DRS)?
The State Revenue Office established the current Document Return System or DRS in 1993.
Payment of document duty by return has been designed to enable ‘authorised persons’ to meet their obligation to stamp documents without the need to present such documents to the State Revenue Office for stamping.
Authorised Persons may endorse documents at their place of business. Payment is then made to the Commissioner of State Revenue for the total amount of duty endorsed on the documents by the lodging of a periodic return statement.
For more information, click on the links below:
Further Information
More information can be obtained by using the links provided
below or calling the SRO on 132 161.
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