Duty changes on the horizon for NSW LRBA and concessional transfers

Transactions in NSW where member-owned business real property is transferred at a concessional rate to an SMSF and LRBA transactions are likely to be impacted with higher duty in the next couple of months.  The bill proposing the increase has made it through the lower house and is expected to be on the agenda the next time the upper house sits in October.

What are the changes?  

NSW Holding Trust Deed

Quite simply, if property is purchased in NSW and the holding trust deed identifies NSW property, instead of $50 duty it will now be $500 if:
•    the holding trust deed names the super fund
•    full stamp duty or concessional duty has been paid on the purchase
•    all payment for the property was provided by the trustee of the fund

Compared to other states and territories in the country this is a whopping increase of 900%!
 
Generally when concession requirements are met for a Holding Trust Deed which identifies the property, duty will only be nominal as shown by other states and territories:
VIC property – exempt from duty
ACT property – $20
QLD property – does not require lodgement, so nil
WA property – $20
TAS property – $50
SA property – exempt from duty
NT property – $5

 

Concession Transfers without borrowing

The current NSW duty law provides that if a member owns business real property in their individual name (not corporate), and otherwise meets the eligibility requirements, duty on the transfer of their interest in the property to their SMSF is only $50.  

This is only where the sale or transfer does not involve borrowing (which is already charged at the concessional rate of $500).  

If the proposed changes are made law, the $50 on these transfers will increase to $500.

As a result of the complexity of this area it appears that the Duties office is now taking a 'blanket approach' to SMSF concessional stamping.    

We will keep you up to date on these proposed changes.