Conveyance Duty (ACT)

Stamp duty, or conveyance duty as it is known in the Australian Capital Territory, is a tax placed on the value of dutiable property in a transaction. The dutiable value is usually the property’s value on the open market. The duty is collected for the State Government by the ACT Revenue Office. It is governed by the Duties Act 1999.

Dutiable property

Dutiable property includes:

• land in the ACT, or an option to buy;
• a Crown lease or sub-lease or an option to buy;
• a land-use entitlement;
• a commercial lease;
• an interest in a partnership that holds property;
• goods in the ACT, if they involve a transaction that includes duty on property, but not including goods such as goods under manufacture, livestock, a register motor vehicle or a boat.

When does conveyance duty apply?

Conveyance duty is charged when:

• property is sold or transferred, or when agreement is made for this;
• a declaration of trust is made over a property;
• a Crown lease or sublease is granted;
• a commercial lease is granted.

The duty must also be paid within 14 days unless the transfer is a declaration of trust or a commercial lease, when it must be paid within 90 days.

A solicitor or conveyancer normally lodges an application for conveyance duty assessment, and arranges for the duty to be paid, as part of a property settlement.

How is conveyance duty calculated?

The ACT Revenue Office uses formulas to calculate the amount of conveyance duty on a transaction, or the “dutiable value”. This value is the greater of what is being paid for the property or its market value.

As with income tax, conveyance duty is calculated using a sliding scale. The standard rates depend on whether the property is commercial or non-commercial.

Commercial properties include warehouses, factories, restaurants, hotels, caravan parks, shops and mixed-use properties. Non-commercial properties are those used solely for residential purposes, primary production or home businesses.

For commercial properties, there is no conveyance duty payable if the value of the property is $1,500,000 or less. For property values at more that $1,500,000, duty is charged at a flat rate of 5%.

For non-commercial property, the standard rates for are:

Property value

Up to $200,000 = $20 or $1.2% for every $100 or part, whichever is greater

$200,000 to $300,000 = $2400 plus 2.2% of the value over $200,000

$300,001-$500,000 = $4600 plus 3.4% of the value over $300,000

$500,001-$750,000 = $11,400 plus 4.32% of the value over $500,000

$750,001-$1,000,000 = $22,200 plus 5.9% of the value over $750,000

$1,000,001 – $1,455,000 = $36,950 plus 6.4% of the value over $1,000,000

Over $1,455,000 =  4.54% of the total transaction value

Conveyance duty concessions and exemptions

A concession or exemption can be available in some circumstances, such as those outlined below.

Deceased estates

A beneficiary, executor or administrator of a deceased estate does not have to pay conveyance duty, as long as the transfer is made under and in conformity with the instructions in the will. If the transfer is only partly in conformity with the will, conveyance duty is payable on the non-conformant portion.

Family transfers

Transfers of property between family members usually incur conveyance duty but some qualify for an exemption or concession.

Conveyance duty does not have to be paid when property is transferred between a married or de facto couple if the property is the principal place of residence, and the property is then held equally by both partners. It also does not have to be paid on a transaction made under a court order for the distribution of property as a result of the end of a relationship between partners.

It is also not payable on some land transactions where the land used for primary production is transferred to a younger generation.

Bankruptcy and insolvency

Conveyance duty is not payable on a property transfer as a result of the appointment of a receiver or trustee in bankruptcy, or a liquidator, or to a former bankrupt from the estate of a former bankrupt.

Trusts

Conveyance duty is not payable in relation to trusts when, for example, a trustee retires or a new trustee is appointed, or when certain transfers are made under a managed investment scheme.

Miscellaneous exemptions

Conveyance duty is not payable on a range of other property transactions, such as when:

• transfers are made during a corporate restructure;
• property is transferred from one superannuation form to another (with conditions);
• property is held in trust for a hospital or school;
• property is transferred to entities for community housing or special disability trusts;
• a mortgage is discharged or transferred;
• it would be payable by the Commonwealth, a state or territory, or a prescribed authority of the Commonwealth, a state or territory.

For advice or representation in any legal matter, please contact Armstrong Legal.