Stamp Duty (NT)
Stamp duty is one of several levies and taxes that are imposed by states and territories. In the Northern Territory, stamp duty is administered by the Territory Revenue Office, which forms part of the Department of Treasury and Finance. This page deals with stamp duty in the NT.
The rules for how stamp duty is imposed are contained in the Stamp Duty Act. The Territory Revenue Office has also issued a number of guidelines to assist people with understanding their stamp duty obligations.
How is stamp duty imposed?
In the NT, stamp duty is imposed on dutiable instruments and certain kinds of dutiable transactions.
Dutiable instruments include:
- motor vehicle certificates of registration
- deeds that create trusts, and
- policies of insurance.
Dutiable transactions include sales of land and buildings, sales of mining and petroleum interest and sales of goods when conveyed with an interest in land.
Stamp duty also applies to transactions undertaken without a dutiable instrument, provided they would have been subject to stamp duty if a dutiable instrument had been used. In other words, a person cannot transfer dutiable property to another person and avoid stamp duty by not making the transfer in writing.
What is dutiable property?
Stamp duty is generally imposed if a dutiable instrument or dutiable transaction relates to dutiable property, which includes land and certain business assets (eg goodwill). It also includes options to purchase dutiable property, and rights to use intellectual property. Shares and units are not subject to stamp duty. However, shares in land-rich companies may be subject to landholder duty.
How much stamp duty do I have to pay?
Stamp duty is calculated based on the dutiable value of the dutiable property that forms the basis of the transaction. This will generally be the greater of the amount paid for the dutiable property and its market value (free of encumbrances such as mortgages).
There are also specific rules for calculating the dutiable value of certain mineral exploration licences. The amount of stamp duty paid is then based on a statutory formula, which differs between the kinds of dutiable instruments and transactions.
If the dutiable transaction is a transfer of dutiable property, the amount of duty payable is 5.45% of the dutiable value (if the value of the property is greater than $3,000,000). If the value of the property is more than $525,000 but less than $3,000,000, the rate is 4.95%.
A complex formula applies when the dutiable value is $525,000 or less. In the case of a motor vehicle registration, the rate is 3%.
How do I pay stamp duty?
Stamp duty is payable by the person who acquires the dutiable property (the purchaser). It is paid by lodging the dutiable instrument and a lodgement form, together with a cheque for the amount of duty, with the Territory Revenue Office. The Office then stamps the dutiable instrument stating that duty has been paid and returns it to you. It must also stamp the counterparts of the instrument for you at a fee of $5 per counterpart.
The lodgement must be made within 60 days of the dutiable instrument being signed, although certain kinds of dutiable instruments such as motor vehicle registrations need not be lodged. The duty must generally also be paid during this 60-day period. If it is not paid within this time, a penalty or interest for late payment may apply.
Exemptions and concessions
Certain kinds of transactions are exempt from stamp duty.
- transferring a share in your home to your spouse, provided they did not pay anything
- transfers made under property settlements following a divorce
- certain kinds of leases are not subject to stamp duty – for example, leases relating to retirement villages.
Other transfers of property between family members will generally be subject to stamp duty.
Unlike some other states and territories such as NSW, the NT First Homeowner Grant does not provide a concession on stamp duty. However, individuals are entitled to a rebate of up to $7000 when they acquire the whole beneficial interest in a principal place of residence from another individual. This applies in relation to certain qualifying homes, such as a home that has not previously been occupied.
If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.