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The State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (Act) was assented to on 19 May 2022. Its most significant changes are to extend the scope of “dutiable transaction” and to extend the operation of the Anti-avoidance provisions to State revenue legislation generally.

The Act also introduces a refund for surcharge duty and surcharge land tax for Australian developers where the residential land purchased was subsequently wholly or predominantly used for commercial or industrial purposes.

Dutiable transactions

The Act amends s 8(1) of the Duties Act to expand “dutiable transactions” to include “change of beneficial ownership” – new s8(1)(b)(ix).

“Change in beneficial ownership” is defined in s 8(3) to include:

  1. creation of dutiable property
  2. extinguishment of dutiable property
  3. change in equitable interest in dutiable property
  4. dutiable property becoming the subject of a trust, and
  5. dutiable property ceasing to be the subject of a trust.

In new s 8AA acknowledgement of a trust becomes a dutiable transaction.

  • Thus at least the following transactions which are currently not dutiable will become dutiable:
  • grant of an option over dutiable property for valuable consideration
  • vesting dutiable trust property in a beneficiary
  • creation of trust interests that do not involve a declaration of trust
  • grant of a lease for consideration that is not a premium, and
  • declaration of trust confirming existing trust terms.

There are a number of “excluded transactions” also defined in s 8(3):

  1. purchase, gift, allotment or issue of a unit in a unit trust scheme
  2. cancellation, redemption or surrender of a unit in a unit trust scheme
  3. abrogation or alteration of a right relating to a unit in a unit trust scheme
  4. payment of an account owing for a unit in a unit trust scheme
  5. grant, renewal or variation of a lease for no consideration
  6. grant of an easement for no consideration
  7.  grant of a profit a prendre for no consideration
  8. grant of security interest
  9. change in a trustee’s right of indemnity
  10. creation of dutiable property by statute
  11. transactions prescribed by the regulations,
  12. a combination of the above.

Section 8AA overrides the NSW Court of Appeal decision in Benidorm’s case (2020) NSWCA 285. The Commissioner’s leave to appeal to the High Court was refused. A declaration of trust that does no more than declare an existing trust will now dutiable.

The person liable to duty is the person who acquires the new beneficial interest or whose beneficial interest increased – s 9.

These terms will apply from royal assent to the Act (19 May 2022). There is an exception to this where the transaction occurs after the date of royal assent and the transaction occurs in accordance with an agreement or arrangement entered into before the date of royal assent.

Property developer issues

The grant of an option is now dutiable – it is the creation of a new interest in dutiable property. Under general principles duty is payable on the higher of the consideration or the unencumbered value. The dutiable property conferred by the grant of an option is the interest the option confers in the underlying property. It is not the value of the property itself that is relevant but rather the value of the interest conferred by the option.

What is the consideration could be an issue where the consideration is nominal; whether there is an unencumbered value that is greater than the consideration even though the parties are at arm’s length.

One area of interest will be where the option fee is nominal, however, there is a security deposit which if exercised is applied towards the purchase price but if not exercised it is forfeited by the grantee. Is the security deposit in fact consideration for these purposes. The Grantor would not grant the option without that term.

Where the option is exercised s 22(4) of the Duties Act provides that the amount or value of the consideration for the transfer of land includes the amount or value of the consideration provided by or on behalf of the transferee for the option.

The Commissioner has published a note on the application of the legislation to options. Duty on an option is not credited towards the duty payable on exercise of the option. The note also states that duty is not payable on security deposits. Just what security deposits will fall within the scope of this statement remains to be seen.

New foreign surcharge duty and land tax refund for Australian based developers

The Act introduces an additional category for refund of stamp duty and land tax for a foreign purchaser who is an Australian based developer. Application for refund of stamp duty or land tax can be made where the residential land acquired has been used by the purchaser or related party wholly or predominantly for commercial or industrial purposes. Application for refund needs to be made within 12 months of the entitling event.

This category of use would also be eligible for exemption under s 104ZJA(3).

Anti-avoidance provisions

The Anti-avoidance provisions in Part 11A of the Duties Act are replaced with Anti-avoidance provisions in the Taxation Administration Act. These provisions will apply to all revenue laws the subject of the Taxation Administration Act.

The meaning of “avoid” is extended to include postponing payment of tax – s 106I.

The requirement that the tax avoidance scheme be of an artificial, blatant or contrived nature has been dropped – s 106J(1).

There is now scope for these provisions to have a wider operation in relation to stamp duty than previously.

Tax promoter penalty provisions are also introduced.


There will be a large number of transactions in relation to dutiable property not previously dutiable that will need to be analysed to determine if duty is payable.

The possibility of there being a tax scheme will need to be considered in the context of all State taxes.

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