Duties Act 1997 No 123
220 Refinancing of loans
(1) In this section—land used for aquaculture means land subject to an aquaculture permit (within the meaning of the Fisheries Management Act 1994).refinancing mortgage means a mortgage that—(a) secures the amount of the balance outstanding under an earlier mortgage that is discharged or to be discharged as part of the arrangements for the new mortgage, and(b) is created to secure an advance to the same borrower as under the earlier mortgage, and(c) is over the same or substantially the same property or part of the property as the earlier mortgage.(2) For the purposes of subsection (1), mortgages are created to secure an advance to the same borrower if, either directly by the mortgages themselves or indirectly through one or more collateral arrangements, the same person obtains the advances secured by them.(3) A refinancing mortgage is taken to have been stamped with ad valorem duty as a mortgage in respect of the duty-free refinancing amount, except as provided by subsection (5).(3A) For the purposes of this section, the duty-free refinancing amount is the lesser of the following amounts—(a) the amount secured by the earlier mortgage on which duty has been paid under this Act or in relation to which an exemption from duty has been obtained,(b) $1,000,000.(3B) However, if the refinancing mortgage is over land used for primary production or land used for aquaculture, the duty-free refinancing amount is the maximum amount payable under or secured by the earlier mortgage (being an amount in relation to which mortgage duty has been paid or in relation to which an exemption from duty has been obtained).Note.“Land used for primary production” is defined in the Dictionary.(4) If an advance is refinanced by more than one lender, so that mortgages given to the lenders together secure the balance outstanding under an earlier mortgage, the definition of refinancing mortgage in subsection (1) is to be construed as though—(a) the reference to a mortgage securing the outstanding balance were a reference to the aggregate of such mortgages, and(b) the reference to property were a reference to the property securing the aggregate of refinancing advances made by the lenders under their combined mortgages, to the intent that, if the requirements of the definition, as so construed, are satisfied, each lender is taken, for the purposes of this section, to be the holder of a refinancing mortgage.(5) If, as provided by subsection (4), each of a number of lenders is the holder of a refinancing mortgage, a refinancing mortgage held by each lender is taken to have been duly stamped with ad valorem duty as a mortgage in respect of an amount equal to the same proportion of the duty-free refinancing amount as the amount secured by that mortgage bears to the total amount secured by the refinancing mortgages held by all the lenders.(6) If each of two or more refinancing mortgages severally secures the same advance—(a) the provisions of subsection (3) or (5), as the case may be, apply to such one of the mortgages as the Chief Commissioner determines, and(b) no duty is chargeable in respect of any of the others.(7) (Repealed)(8) Duty at the rate of $4 per $1,000 or remaining part of $1,000 is payable on the amount by which the advance made under a refinancing mortgage (not being a mortgage on which, by virtue of subsection (6) (b), no duty is chargeable) exceeds—(a) the duty-free refinancing amount, or(b) the proportion of that amount referred to in subsection (5), in the case of a refinancing to which subsection (4) applies.(8A) If a borrower is a related body corporate of a borrower under an earlier mortgage, the firstmentioned borrower is taken to be the same borrower or the same person for the purposes of subsection (1) or (2).(9) If a borrower under an earlier mortgage dies, or is a party to a marriage that has been dissolved or annulled or, in the opinion of the Chief Commissioner, has broken down irretrievably or is party to a de facto relationship that, in the opinion of the Chief Commissioner, has been terminated, the remaining borrower is, or the remaining borrowers are, taken to be the same borrower or the same person for the purposes of subsection (1) or (2).(10) A party to a marriage or de facto relationship may provide a statement to the Chief Commissioner, in the form of a statutory declaration, to the effect that—(a) in the case of a marriage—(i) the party intends to apply for a dissolution or an annulment of the marriage, or(ii) the parties to the marriage have separated, and there is no reasonable likelihood of cohabitation being resumed, or(b) in the case of a de facto relationship, the de facto relationship has been terminated.The Chief Commissioner is required to have regard to any such statement in exercising his or her functions under subsection (9).(11) Subsection (10) does not limit the functions of the Chief Commissioner under section 72 of the Taxation Administration Act 1996.