TRANSFER DUTY
Transfer duty may be described as a general revenue tax, which is imposed under the Duties Act 2008 (‘the Act’) on various dutiable transactions (whether documented or not) including transfers of real estate and certain business assets.
Transfer duty is imposed on dutiable transactions. The Act specifies a list of the types of transactions, together with a list of dutiable property that may be the subject of duty.
There are ten dutiable transactions under the Act, the most common being:
- a transfer of dutiable property;
- an agreement for the transfer of dutiable property;
- a declaration of trust over dutiable property; and
- an acquisition of new dutiable property on its creation, grant or issue.
- transfer of special dutiable property.
Documents which are not classified as dutiable transactions are:
- deeds (such as new discretionary trust and new superannuation fund deeds) that do not effect or evidence a dutiable transaction.
- leases, unless there is some form of payment for the grant, transfer or surrender of the lease.
- mortgages, unless it is a transfer of a security interest for an amount less than its market value.
The dutiable value of a dutiable transaction is generally the amount paid for such a transaction, or the unencumbered value of the dutiable property that is the subject of the dutiable transaction. However, this principle does not apply to all dutiable transactions, and there are also specific rules to determine the dutiable value of certain types of transactions set out within the Duties Act. Additionally, there are some transactions which may be exempt from duty. An example is some family farm transfers. The rules around a family farm transfer are very ridged and we have given a brief explanation of these rules in previous articles including the fact that the interpretation of the family farm transfer provisions of the Act by the Office of State Revenue WA have changed in recent times.
The Act requires that dutiable transactions must be lodged with the Office of State Revenue within two months of signing the documents. If the documents are not lodged in time then fines may be applied.
If you are considering entering into a legal arrangement of any sort, we recommend that you seek legal advice to determine what the duty implications (if any) may be, if any exemptions may be available to you to reduce or eliminate duty and to ensure you meet any lodgement deadlines required.
WA Property Lawyers are well placed to answer any queries you have in regard to transfer duty and we also have a very experienced settlements department who can assist you with the settlement of property or business sales and purchases, be it large or small.