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Recent Changes to Duty Laws in NSW

The New South Wales government has just passed the State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW) ‘the Amending Act’, which introduces a number of changes to the state’s taxation system and amends several legislations including Duties Act 1977 (NSW) ‘the Duties Act’. The most significant changes are set out below: 

Dutiable transactions 

The amending act expands “dutiable transactions” to include “change of beneficial ownership. 

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

  1. creation of dutiable property 

  1. extinguishment of dutiable property 

  1. change in equitable interest in dutiable property 

  1. dutiable property becoming the subject of a trust, and 

  1. dutiable property ceasing to be the subject of a trust. 


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

(a) the purchase, gift, allotment, or issue of a unit in a unit trust scheme, 

(b) the cancellation, redemption or surrender of a unit in a unit trust scheme, 

(c) the abrogation or alteration of a right relating to a unit in a unit trust scheme, 

(d) the payment of an account owing for a unit in a unit trust scheme, 

(e) the grant, renewal, or variation of a lease for no consideration, 

(f) the grant of an easement for no consideration, 

(g) the grant of a profit a prendre for no consideration, 

(h) the provision of a security interest within the meaning of the Personal Property Securities Act 2009 of the Commonwealth, 

(i) a change in a trustee’s right of indemnity, 

(j) the creation of an interest in dutiable property by statute, 

(k) a transaction of a kind prescribed by the regulations, 

(l) a combination of the transactions referred to in paragraphs (a) to (k). 



Duty on acknowledgments of trust 

The changes are subsequent to the decision in Chief Commissioner of State Revenue v Benidorm Pty Ltd [2020] NSWCA 285 (Benidorm) where Court of Appeal held that a document that does not effect a transfer but merely acknowledges a legal position is not liable to duty under the Duties Act.  

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

Thus, the following transactions which were 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. 

The grant of an option 

The grant of an option is now dutiable. 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.


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

The amending 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 Division 3, Part 10A of the Taxation Administration Act. These provisions will apply to all revenue laws the subject of the Taxation Administration Act. Mere postponement of tax is now regarded as tax avoidance.  

The Amending Act also introduces promoter penalties regime by inserting division 3, Part10A of the Taxation Administration Act which heavily penalises any promoter of taxation avoidance scheme which could apply to accountants, solicitors or any professional advisor who advises tax avoidance schemes.  


The Amending Act represents a significant broadening of the types of transactions subject to stamp duty in NSW, as well as making important changes to the anti-avoidance and penalty tax provisions that apply to all NSW State taxes. There is a lot of uncertainty around how the provisions will be applied, and practitioners are eagerly waiting for further guide notes from the Commissioner.  

It will be important to seek legal advice before entering into any property transaction in order to ensure that you are aware of your obligations and potential liabilities. 

Useful resources: 





Important: Nothing in this note constitute legal advice and should not be relied as such. This article is of general nature only and we do not accept any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. 

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