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Contents (1997 - 123)
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Duties Act 1997 No 123
Current version for 1 July 2019 to date (accessed 27 February 2020 at 21:25)
Chapter 2A Part 1
Part 1 Preliminary
104G   Introduction and overview
(1)  This Chapter charges duty on certain dutiable transactions in respect of residential land that are, or are taken to be, transfers to foreign persons.
(2)  The duty charged by this Chapter is additional to any duty charged by Chapter 2.
(3)  The duty charged by this Chapter is referred to as surcharge purchaser duty.
104H   Application of Chapter 2
Except as provided by this Chapter or Chapter 2, Chapter 2 does not apply in relation to duty charged by this Chapter.
Note.
 See, for example, sections 15, 16 and 16A.
104I   Definitions
(1)  In this Chapter:
dwelling means a house, or a room or a suite of rooms (whether or not forming part of a building or a detached building), that is:
(a)  occupied or used as a separate dwelling, or
(b)  so constructed, designed or adapted as to be capable of being occupied or used as a separate dwelling.
partnership interest—see section 104K.
residential land means any of the following and does not include any land used for primary production:
(a)  a parcel of land on which there are one or more dwellings, or a parcel of land on which there is a building or buildings under construction that, when completed, will constitute one or more dwellings,
(b)  a strata lot, if it is lawfully occupied as a separate dwelling, or suitable for lawful occupation as a separate dwelling,
(c)  a utility lot (within the meaning of the Strata Schemes Management Act 2015), if its use is restricted to the owner or occupier of a strata lot referred to in paragraph (b),
(d)  a land use entitlement, if it entitles the holder of the land use entitlement to occupy a building, or part of a building, as a separate dwelling,
(e)  a parcel of vacant land (including any land that the Chief Commissioner is satisfied is substantially vacant) that is zoned or otherwise designated for use under an environmental planning instrument (within the meaning of the Environmental Planning and Assessment Act 1979) for residential purposes or principally for residential purposes.
Note.
 
Land used for primary production is defined in the Dictionary.
residential-related property—see section 104K.
retirement visa holder means a person who holds:
(a)  a visa of a subclass specified by regulations (as in force at any time) made under the Migration Act 1958 of the Commonwealth as a Subclass 405 (Investor Retirement) visa or a Subclass 410 (Retirement) visa, or
(b)  a visa under that Act of a class (or a subclass) determined by the Chief Commissioner to be equivalent to a subclass referred to in paragraph (a).
(2)  A reference in this Chapter to a dwelling does not include a reference to a room or a suite of rooms determined by the Chief Commissioner not to be a dwelling for the purposes of this Chapter.
104J   Meanings of “foreign person” and “foreign trustee”
(1)  In this Chapter:
foreign person means a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth, as modified by this section.
foreign trustee means a person who is a foreign person because of the person’s capacity as the trustee of a trust.
(2)  The definition of foreign person in the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth is modified as follows:
(a)  an Australian citizen is taken to be ordinarily resident in Australia, whether or not the person is ordinarily resident in Australia under that definition,
(b)  a New Zealand citizen who holds a special category visa, within the meaning of section 32 of the Migration Act 1958 of the Commonwealth, at any particular time is taken at that time to be an individual whose continued presence in Australia is not subject to any limitation as to time imposed by law.
Note.
 Section 5 of the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth provides that an individual who is not an Australian citizen is ordinarily resident in Australia at a particular time (and is therefore not a foreign person) if and only if:
(a)  the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time, and
(b)  at that time:
(i)  the individual is in Australia and the individual’s continued presence in Australia is not subject to any limitation as to time imposed by law, or
(ii)  the individual is not in Australia but, immediately before the individual’s most recent departure from Australia, the individual’s continued presence in Australia was not subject to any limitation as to time imposed by law.
(3)  For the purposes of charging surcharge purchaser duty on a surcharge duty transaction, a person is taken to be a foreign person if the person is a foreign person when a liability for duty charged by Chapter 2 on the transaction arises (or would arise but for section 53A or a concession or exemption from duty under that Chapter).
Note.
 See section 12.
104K   Meaning of “residential-related property”
(cf section 11)
Residential-related property is any of the following dutiable property:
(a)  residential land in New South Wales,
(b)  an option to purchase residential land in New South Wales,
(c)  an interest in any residential-related property referred to in paragraph (a) or (b), except to the extent that:
(i)  it arises as a consequence of the ownership of a unit in a unit trust scheme and is not a land use entitlement, or
(ii)  it is, or is attributable to, an option over residential-related property, or
(iii)  it is a marketable security,
(d)  a partnership interest (being an interest in a partnership that has partnership property that is residential-related property elsewhere referred to in this section).
104L   Transactions on which surcharge purchaser duty is charged
(cf section 8)
(1)  Surcharge purchaser duty is chargeable on the following dutiable transactions:
(a)  a transfer of residential-related property to a foreign person,
(b)  the following transactions:
(i)  an agreement for the sale or transfer of residential-related property to a foreign person,
(ii)  a declaration of trust over residential-related property by a person who, because of the declaration, is a foreign trustee in respect of the trust,
(iii)  a surrender of an interest in residential land in New South Wales to a foreign person,
(iv)  a foreclosure of a mortgage over residential-related property by a mortgagee who is a foreign person,
(v)  a vesting of residential-related property in a foreign person by or as a consequence of an order of a court of this or another jurisdiction, whether inside or outside Australia,
(vi)  the enlargement of a term in residential land into a fee simple under section 134 of the Conveyancing Act 1919 where the person who acquires the estate in fee simple (or, if there is more than one such person, at least one of those persons) is a foreign person,
(vii)  a vesting of residential land in New South Wales in a foreign person by, or expressly authorised by, statute law of this or another jurisdiction, whether inside or outside Australia,
(viii)  a lease of residential land to a foreign person, being a lease in respect of which a premium is paid or agreed to be paid.
(2)  Such a transfer or transaction is a surcharge duty transaction for the purposes of this Act.
Note.
 The above listed transfers and transactions are all also dutiable transactions under Chapter 2. Generally speaking, a transferee (including a person taken to be a transferee under sections 9 and 104N) who is a foreign person is liable to pay duty on those transactions under Chapter 2 and under this Chapter.
(3)  A reference in subsection (1) (b) (ii) to a person who, because of a declaration of trust, is a foreign trustee in respect of the trust includes a reference to a person who would be a foreign trustee in respect of the trust if any identified property to be vested in the person were actually vested in the person when the declaration is made.
(4)  In this Chapter:
declaration of trust and premium have the same meanings as in Chapter 2.
Note.
 See section 8 for definitions of the above expressions.
lease or lease of residential land means a lease of residential land in New South Wales or an agreement for a lease of residential land in New South Wales.
transfer includes an assignment and an exchange.
Note.
 See also sections 104N and 104O in relation to transactions treated as transfers.
104M   Vesting of land in New South Wales by statute law
(1)  Section 8A is to be applied, for the purposes of this Chapter, in determining whether or not residential land is vested in New South Wales under statute law and in identifying a person in whom residential land is so vested.
(2)  For those purposes, a reference in section 8A to section 8 (1) (b) (vii) is taken to include a reference to section 104L (1) (b) (vii).
104N   Imposition of surcharge purchaser duty on transactions that are not transfers
(cf section 9)
(1)  The duty charged by this Chapter on a surcharge duty transaction referred to in section 104L (1) (b) is to be charged as if each such surcharge duty transaction were a transfer of residential-related property.
(2)  Accordingly, for the purpose of charging duty under this Chapter, in relation to a surcharge duty transaction specified in Column 1 of the following Table:
(a)  the property specified opposite the surcharge duty transaction in Column 2 is taken to be the property transferred (and a reference in this Act to property transferred includes a reference to such property), and
(b)  the person specified opposite the surcharge duty transaction in Column 3 is taken to be the transferee of the residential-related property (and a reference in this Act to a transferee includes a reference to such a person), and
(c)  the transfer of the residential-related property is taken to have occurred at the time specified opposite the surcharge duty transaction in Column 4 (and a reference in this Act to the time at which a transfer occurs includes a reference to such a time).
Table
Column 1
Column 2
Column 3
Column 4
Surcharge duty transaction
Property transferred
Transferee
When transfer occurs
agreement for sale or transfer
the property agreed to be sold or transferred
any foreign person who is a purchaser or transferee
when the agreement is entered into
declaration of trust
the property vested or to be vested in the declarant
any person declaring the trust who, because of the declaration, is a foreign trustee in respect of the trust
when the declaration is made
surrender
the surrendered property
any foreign person to whom the property is surrendered
when the surrender takes place
foreclosure
the mortgaged property
any foreign person who is a mortgagee
when the foreclosure order is made
vesting by court order
the vested property
any foreign person in whom the property is vested
when the order is made
enlargement of a term in land into a fee simple
the estate in fee simple
any foreign person who acquires the estate in fee simple
when the term is enlarged
vesting by statute law
the vested land in New South Wales
any foreign person in whom the land is vested
when the vesting by statute law occurs
lease
the leased property
any foreign person who is the lessee
when the lease is entered into
Note.
 See also section 104O and Part 2 of Chapter 3 for other transactions that are deemed to be transfers of residential-related property under this Chapter.
104O   Other transactions taken to be transfers
(1)  Sections 9A–9C apply, subject to this section and to any other necessary modifications, for the purpose of charging surcharge purchaser duty under this Chapter.
(2)  For that purpose:
(a)  a change in partnership arrangements that is of a kind referred to in section 9A is taken to be a transfer of a partnership interest (within the meaning of this Chapter) if the partnership has partnership property that is residential-related property, and
(b)  a transaction of a kind referred to in section 9B in respect of an option to purchase residential land in New South Wales is taken to be a transfer of an option to purchase residential land, and
(c)  a transaction of a kind referred to in section 9C that is a novation of an agreement for the lease of residential land in New South Wales is taken to be a transfer of residential-related property as if:
(i)  the lessee’s interest in the agreement were residential-related property, and
(ii)  the novation of the agreement were a transfer of that residential-related property.
(3)  Surcharge purchaser duty is chargeable on any such transfer if any of the persons taken to be transferees by section 9A, 9B or 9C (as the case may be) are foreign persons.
(4)  To avoid doubt:
(a)  this section does not affect liability for surcharge purchaser duty on a transfer of a partnership interest that occurs otherwise than because of a change in partnership arrangements, and
(b)  a reference in this Act to a transfer of residential-related property includes a reference to a transaction taken to be a transfer by this section, and
(c)  a reference in this Act to a surcharge duty transaction includes a reference to a transaction chargeable with surcharge purchaser duty under this section, and
(d)  a reference in this Act to residential-related property includes, in relation to a transfer that is taken to occur under subsection (2) (c), a reference to a lessee’s interest in an agreement for the lease of residential land in New South Wales.
104P   What form must a surcharge duty transaction take?
To avoid doubt, section 10 extends to dutiable transactions that are surcharge duty transactions.
104Q   When does a liability for duty arise?
(1)  Section 12 applies in respect of surcharge purchaser duty in the same way as it applies in respect of duty charged by Chapter 2.
(2)  For that purpose, references in section 12 are to be read as follows:
(a)  a reference to duty charged by Chapter 2 is to be read as a reference to surcharge purchaser duty,
(b)  a reference to dutiable property is to be read as a reference to residential-related property,
(c)  a reference to a dutiable transaction is to be read as a reference to a surcharge duty transaction.
104R   Who is liable to pay surcharge purchaser duty?
(cf section 13)
(1)  The person liable to pay surcharge purchaser duty is the transferee.
(2)  Only transferees who are foreign persons are liable to pay surcharge purchaser duty.
104S   Liability for surcharge purchaser duty on certain trust-related transactions
(1)  This section applies to a surcharge duty transaction that is:
(a)  a transfer, or an agreement for the sale or transfer, of residential-related property where the transferee is acquiring the residential-related property in a trustee capacity, or
(b)  a declaration of trust over residential-related property by a person who, because of the declaration, is a foreign trustee in respect of the trust.
(2)  The transferee is only liable to pay surcharge purchaser duty on any such surcharge duty transaction if the transferee is a foreign trustee in respect of the trust.
(3)  In applying the provisions of this Chapter to a surcharge duty transaction referred to in subsection (1) (a), the transferee is not to be treated as a foreign person unless the transferee is a foreign trustee.
Note.
 For example, a trustee who is not a foreign trustee will not be liable for surcharge purchaser duty, even if the trustee is otherwise a foreign person.
104T   Property purchased by apparent purchaser
(1)  This section applies to a transfer, or an agreement for the sale or transfer, of residential-related property if the Chief Commissioner is satisfied that the transferee is an apparent purchaser and that the money for the purchase has been or will be provided by the real purchaser.
(2)  In applying the provisions of this Chapter in relation to a transfer or agreement to which this section applies:
(a)  the apparent purchaser is taken to be acquiring the residential-related property in a trustee capacity, and
(b)  if any of the real purchasers are foreign persons, the apparent purchaser is taken to be a foreign trustee in respect of the trust.
(3)  Accordingly, section 104S (3) applies in relation to the apparent purchaser.
(4)  For the purposes of this section, money provided by a person other than the real purchaser is taken to have been provided by the real purchaser if the Chief Commissioner is satisfied that the money was provided as a loan and has been or will be repaid by the real purchaser.
(5)  This section applies whether or not there has been a change in the legal description of the residential-related property between the purchase of the property by the apparent purchaser and the transfer to the real purchaser.
Note.
 For example, if the residential-related property is land, this section continues to apply if there is a change in the legal description of the residential-related property as a consequence of the subdivision of the land.
104U   Charging of duty at relevant rate
(cf section 19 and Part 3 of Chapter 2)
(1)  Except as otherwise provided by this section, surcharge purchaser duty is to be charged on the dutiable value of the residential-related property subject to the surcharge duty transaction at a rate of 8% of the dutiable value of the residential-related property.
(2)  If any of the transferees are not foreign persons, surcharge purchaser duty is to be charged only on the proportion of the dutiable value of the residential-related property that is the same as the proportion of the share or shares in that property transferred to foreign persons.
(3)  If the surcharge duty transaction consists of a partition and any of the transferees are not foreign persons, surcharge purchaser duty is to be charged only on the proportion of the dutiable value of the partition that is the same as the proportion of the share or shares in the residential land transferred, or agreed to be transferred, to foreign persons.
(4)  In this section:
partition has the same meaning as in section 30.
104V   The liability of joint tenants
(1)  Section 14 applies in respect of surcharge purchaser duty in the same way as it applies in respect of duty charged by Chapter 2.
(2)  For that purpose, a reference in section 14 to duty charged by Chapter 2 is to be read as a reference to surcharge purchaser duty.
104W   When must surcharge purchaser duty be paid?
(cf section 17)
A tax default does not occur for the purposes of the Taxation Administration Act 1996 if surcharge purchaser duty is paid within 3 months after the liability to pay the duty arises.
104X   No double surcharge purchaser duty
(cf section 18)
(1)  If a surcharge duty transaction is effected by more than one instrument, one instrument is to be stamped with the surcharge purchaser duty payable on the surcharge duty transaction and each other instrument is not chargeable with surcharge purchaser duty.
(2)  Surcharge purchaser duty is not chargeable on a transfer of residential-related property made in conformity with an agreement for the sale or transfer of the residential-related property if:
(a)  surcharge purchaser duty has been paid on the agreement, and
(b)  no surcharge purchaser duty is chargeable under section 104Y on the transfer.
(3)  Surcharge purchaser duty is not chargeable on a transfer of residential-related property that is not made in conformity with an agreement for the sale or transfer of the residential-related property if:
(a)  surcharge purchaser duty has been paid on the agreement, and
(b)  no surcharge purchaser duty is chargeable under section 104Y on the transfer, and
(c)  the transfer would be in conformity with the agreement if the transferee was the purchaser under the agreement, and
(d)  the transfer occurs at the same time as, or proximately with, the completion or settlement of the agreement, and
(e)  at the time the agreement was entered into, and at the completion or settlement of the agreement:
(i)  the purchaser under the agreement and the transferee under the transfer are related persons, except as provided by subparagraph (ii), or
(ii)  if the purchaser purchased as a trustee, the transferee and the beneficiary are related persons.
(4)  Surcharge purchaser duty is not chargeable on a transfer to a trustee of residential-related property subject to a declaration of trust if surcharge purchaser duty has been paid on the declaration of trust in respect of the same residential-related property.
(5)  Surcharge purchaser duty is not chargeable on a transfer of residential-related property as a consequence of a foreclosure order if surcharge purchaser duty has been paid on the foreclosure.
(6)  Surcharge purchaser duty is not chargeable on a declaration of trust that declares the same trusts as those upon and subject to which the same residential-related property was transferred to the person declaring the trust if surcharge purchaser duty has been paid on the transfer.
(7)  Surcharge purchaser duty is not chargeable on a declaration of trust if the Chief Commissioner is satisfied that:
(a)  the declaration of trust supersedes another declaration of trust in respect of which surcharge purchaser duty has been paid and declares the same trusts as were declared under the superseded declaration of trust, and
(b)  the beneficiary under the declaration of trust is the same as under the superseded declaration of trust, and
(c)  the residential-related property subject to the declaration of trust:
(i)  is wholly or substantially the same as the property that was the subject of the superseded declaration of trust at the time of the declaration of the superseded declaration of trust, or
(ii)  represents the proceeds of re-investment of property that was the subject of the superseded declaration of trust at the time of the declaration of the superseded declaration of trust, or
(iii)  is property to which both subparagraphs (i) and (ii) apply.
(8)  Despite subsection (1), if a single surcharge duty transaction is effected by more than one electronic registry instrument, it is sufficient that one of those instruments is duly stamped with the duty chargeable on the surcharge duty transaction.
Note.
 See section 290.
104Y   Change in proportion of share transferred to foreign persons
(1)  If the share or shares in the residential-related property agreed to be sold or transferred to foreign persons are less than the share or shares actually transferred to foreign persons, surcharge purchaser duty is to be charged on the additional proportion of the share or shares transferred to foreign persons.
(2)  If the share or shares in the residential-related property agreed to be sold or transferred to foreign persons exceed the share or shares actually transferred to foreign persons under the transfer and surcharge purchaser duty was paid on the agreement:
(a)  surcharge purchaser duty is not chargeable on the transfer, and
(b)  the Chief Commissioner is to reassess the agreement, by calculating the surcharge purchaser duty chargeable in proportion to the share or shares in the residential-related property actually transferred to foreign persons, and refund any excess surcharge purchaser duty paid.
Note.
 Section 104ZF provides for a full refund in cases where no surcharge purchaser duty is payable on the actual transfer because the transferees are no longer foreign persons.