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Stamp Duty in Tasmania
Stamp duty is a kind of levy or tax that is imposed in each of the States and Territories on certain kinds of transactions, commonly known as dutiable transactions. The Tasmanian State Revenue Office is responsible for administering stamp duty. It also administers other State based taxes such as payroll tax and land tax. The rules for how stamp duty is imposed, including certain exemptions and concessions from stamp duty, are contained in the Duties Act 2001. Stamp duty law can be very complex; to help you understand your stamp duty obligations, the State Revenue Office often publishes guidance on its website.
How is stamp duty imposed?
Stamp duty is imposed on dutiable transactions. This term is defined in the Duties Act 2001. For example, a transfer of land (which is a kind of dutiable property) between people is a dutiable transaction. Other examples include a mortgage foreclosure over dutiable property, or a declaration of a trust. From these examples, it is clear that stamp duty is not only imposed on transfers of property; it applies much more broadly. Furthermore, the dutiable transaction does not have to occur in accordance with a written contract. For example, it can occur electronically. Motor vehicle registrations are also subject to stamp duty, but under a separate set of rules that are not discussed in this article.
What kinds of property are dutiable?
Stamp duty only applies to dutiable transactions that occur to dutiable property. The term dutiable property differs between the States and Territories; because of this, it sometimes makes more sense to do certain kinds of transactions in a particular jurisdiction (for example, shares in a company are not subject to duty in Victoria, so a lot of companies are registered in Victoria). The most relevant type of dutiable property in Tasmania is land. Other examples of dutiable property include partnership interests, and options to purchase dutiable property. Generally speaking, shares in a company and units in a unit trust are not subject to duty when they are transferred.
How is stamp duty calculated?
The amount of stamp duty that is payable for a dutiable transaction is calculated based on the dutiable value of the dutiable property. Dutiable value generally means the greater of what is being paid for the property, and its market value free of other interests such as mortgages. General rates of duty then apply to that value. For example, if you transfer land that is worth more than $725,000, the amount of stamp duty that is payable on the transfer is equal to the sum of $27,810 plus 4.5% for every $100 that is over $725,000. If the land was worth slightly less, for example $500,000, the amount of duty is reduced to $12,935 plus 4.25% of every $100 that is over $325,000. It is clear from these examples that calculating stamp duty can be a very complex affair, and you should seek legal advice to make sure you get the calculations right.
Who pays the stamp duty?
The person who gets the property (i.e. the purchaser or the transferee) is liable to pay the stamp duty. It must be paid within 3 months of the dutiable transaction occurring. Generally speaking, stamp duty is paid by lodging the document that you entered into to purchase the property with the State Revenue Office. With the contract, a cheque equal to the amount of duty is lodged. Sometimes a lodgement form may also be required. If you fail to take these steps within the 3 month timeframe, you may be liable to pay penalties or interest for late payment, so you should make sure you get a lawyer to help you fulfil these steps. After you lodge the document, the State Revenue Office will stamp it so that it states you have paid the stamp duty and return it to you. They will also stamp any copies of the document. Make sure you give the State Revenue Office your contact details; sometimes they may disagree with your calculation of the stamp duty and might need to contact you.
Exemptions and concessions
Some transactions are either exempt from stamp duty altogether, or have a lower rate of stamp duty applied to them. These are called exemptions and concessions respectively. For example, some transfers between married people or following a divorce are exempt from stamp duty. Unlike some other States and Territories, first home owners do not have a specific exemption or concession from stamp duty, although they may be able to access a first home owner grant. They may also be entitled to an exemption from land tax, which is a separate kind of tax charged by Tasmania on land. Pensioners are not entitled to any specific duty exemptions or concessions.