Stamp Duty Reform

Fri, 18 Feb 2011 07:24:00 GMT

Stamp Duty Reform 1st March 2011.

Following on going negotiation between the Australian Institure of Conveyancers, WA Divison, and other interested parties, on 17th February 2011, The Minister for Finance, Commerce & Small Business announced long awaiterd changes to the Stamp Duty arrangements on real estate transactions.

Previously there were a number of different triggers as to when a real estate contract needed to be lodged with the Office of State Revenue, and then various time frames following lodgement that these contracts required the stamp duty to be paid.

Basically, these previous arrangements, as well as The Joint Form of General Conditions relating to Real Estate contracts, called for all stamp duties to be paid PRIOR to the settlement of the property.

With increases in the rate, and more particularily the increased value of property, these stamp duty amounts had become quite large and have caused quite a problem for many property buyers, the settlement industry and in some cases financiers.

As from the 1st March, 2011, all new contracts entered into after that date will have much more simplified lodgement requirements and payment arrangements where the settlement agency undertaked the payment of stamp on line with the Office of State Revenue, (Mint Settlements will comply with this requirement.)

These new arrangements provide for the contract to be lodged with the Office of State Revenue within 60 days of execution and payment of stamp duty at settlement, (or at settlement up to a maximum of 36 months on transactions with delayed settlements, transactions awaiting issue of title, or off the plan contracts.)

These new arrangements will greatly assist both property purchasers as well as the conveyancing and financing professions and are welcomed by theses inductries.

Following is the press release from Simon O'Brien, The Minister for Finance;Commerce; Small Business

Thu 17 February, 2011

New transfer duty arrangements commence March 1, 2011

Portfolio: Finance

New, simplified transfer duty arrangements will be introduced in Western Australia on March 1, Finance Minister Simon O'Brien announced today.

The major benefit of the new arrangements will be that for most residential property transfers, a purchaser will be able to pay duty at the time a transaction is settled.

"Currently, purchasers often have to incur borrowing costs to pay duty in advance of settlement where lenders require an endorsed transfer document to proceed with settlement," Mr O'Brien said.

"Under the new arrangements, this will no longer be necessary, provided the purchaser's agent processes the transaction through the Office of State Revenue's online duty system.

"The changes will also significantly simplify the timing rules for the lodgement of property transfer documents.

"The new arrangements should reduce the likelihood of a person failing to lodge their transaction documents on time and then being penalised by the Commissioner of State Revenue."

The Minister said the new arrangements would also extend the time allowed for payment of duty in some cases where the settlement of a property transaction occurs well after the signing of documents - such as where a property is purchased off-the-plan or where settlement is awaiting the issue of a new title.

"In such cases, the current maximum period of two years for the payment of duty will be extended to three years from the date of execution," Mr O'Brien said.

"This better recognises that completion dates are sometimes delayed beyond two years, particularly in the case of off-the-plan transactions."

The new transfer duty arrangements will apply to transactions executed from March 1 and are part of the State Government's ongoing initiatives to reduce red tape for business and the community.

The Minister acknowledged the contribution of a range of industry organisations involved in the design of the new arrangements, including the Australian Institute of Conveyancers (WA), the Law Society of Western Australia and the Real Estate Institute of Western Australia.

Mr O'Brien encouraged settlement agents and other conveyencers to register with the Office of State Revenue to take full advantage of the new 'payment at settlement' arrangements for their clients.

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