Spot the difference Part 3 … stamp duty
20 Aug 2019
Many people in our community live in NSW, but Canberra is their main centre for work, shopping and recreational activities. If they’re buying a property, however, they may not realise the differences between the ACT and NSW conveyancing systems. In this series of articles, Margaret Young explores differences between the ACT and NSW systems related to the Contract for Sale, due diligence, stamp duty and the conveyancing process.
In Part 3 of the series we look at the differences between stamp duty in NSW and ACT.
Part 3 Stamp duty
Stamp duty is the payment that the purchaser must pay to the relevant government for the transaction.
A key difference between the NSW and ACT conveyancing systems is the processes surrounding payment of stamp duty. This includes
- how your stamp duty is assessed
- to whom payment is made
- when payment is required to be made.
ACT Stamp duty
The ACT Government introduced the barrier-free stamp duty model on 18 September 2017. This means that contracts exchanged (dated) after 18 September 2017 have the following stamp duty process:
- Stamp duty is assessed after settlement, when the transfer is lodged for registration.
- The ACT Revenue Office will issue a stamp duty assessment to the purchaser, which the purchaser must pay.
- The stamp duty assessment will set out the time period in which it is due and when/if penalty interest becomes payable.
- The purchaser must complete a Buyer Verification Declaration before settlement and have their reference number noted on the Transfer for proof of identification purposes.
NSW Transfer duty
In NSW ‘stamp duty’ is now known as ‘transfer duty’. The transfer duty is assessed and stamped ‘in-house’ in accordance with NSW Office of State Revenue regulations. This means that, if we’re acting for you, we’ll assess your stamp duty and then complete the stamping in our office.
- Stamp duty is assessed and payable either 3 months from the date of exchange or on settlement, whichever comes first.
- We’ll advise you of the amount of your stamp duty, which you must either pay into our trust account before settlement, or make the funds available from your financier at settlement.
- If stamp duty is not paid within 3 months of the date of exchange, you will incur penalty interest at a rate specified by NSW Office of State Revenue.
- All purchasers must complete a Purchaser Declaration. This confirms your identification and any relevant information that the Office of State Revenue requires.
Unlike in the ACT, if you don’t pay the transfer duty before or on completion, settlement won’t occur.