Stamp Duties (Amendment) Bill
|About this Item||Speakers||Souris Mr George
||Business||Bill, First Reading, Second Reading
STAMP DUTIES (AMENDMENT) BILL
Mr Whelan: On the question of leave, I indicate - not to the Minister for Sport, Recreation and Racing and Minister Assisting the Premier, but to the Minister who previously spoke, the Minister for State Development and Minister for Tourism - that in
future leave will not be granted unless speeches are made available to the Opposition. There are courtesies and traditions that apply. Ministers have been asked to supply speeches, and all we require is a copy of them - nothing more. Leave is granted on this occasion to enable the Minister to make his speech. He is a very courteous Minister. If Ministers do not supply the Opposition with copies of their speeches, we will not grant leave.
Bill introduced and read a first time.
Mr SOURIS (Upper Hunter - Minister for Sport, Recreation and Racing and Minister Assisting the Premier) [8.29], on behalf of Mr Greiner: I move:
The Stamp Duties Bill now before the House ensures that loan security duty is payable where loan securities are transferred between lenders at the instigation of the borrower; simplifies the payment of the fee on cancelled agreements; allows agreements which have been varied to be stamped at the final purchase price; clarifies the provisions relating to loan securities which are used to secure bill facilities; exempts from stamp duty conveyances pursuant to separation agreements as defined in the De Facto Relationships Act; tightens the trust provisions to ensure that ad valorem duty is paid at least once on the original trust property or the re-investment of that property; provides the Chief Commissioner with the authority to refund stamp duty under certain conditions; relaxes the requirements to obtain concessional rates of duty on conveyances of property to trustees; provides a concession where shares are transferred to trustees; exempts from conveyance and loan security duty community tenancy scheme tenants who purchase their own home; exempts from duty any additional loan security taken out to further secure the obligations of first home purchase participants, community tenancy scheme tenants and Department of Housing tenants; provides for relocatable home sites to be granted the same concession as residential leases; provides for the refund of stamp duty paid on a motor vehicle certificate of registration where the vehicle has been previously stolen prior to purchase and is repossessed; provides for the stamping of a document by the Chief Commissioner to be regarded as an assessment; and makes a number of other miscellaneous amendments.
The Stamp Duties Act currently provides that where agreements are rescinded or annulled the ad valorem duty payable on the document is to be refunded less a fee of $25. However, agreements are often rescinded before they are lodged for stamping as there is a two-month period after the date of signing when an agreement may be stamped without penalty. The process of having taxpayers pay the stamp duty on an agreement in the above circumstances and subsequently receive a refund, less the administration fee, is inequitable and onerous. The bill will allow for agreements which are rescinded or annulled within two months of signing and which have not been stamped to be chargeable only with the administration fee of $25, subject to the lodgment of satisfactory evidence as to cancellation. At present, the Stamp Duties Act provides that stamp duty is assessed on documents in the form in which they are first executed. Where there is an instrument of variation increasing the purchase price, stamp duty is payable on the higher amount but, where there is an instrument reducing the purchase price, the duty is still payable on the initial purchase price. This practice is inequitable and the bill will provide that prior to settlement an agreement may be stamped with duty calculated on its final purchase price where there is an instrument of variation reducing the initial purchase price.
Under current legislation, conveyances of property made in accordance with a court order under the De Facto Relationships Act are exempt from stamp duty. However, couples terminating their de facto relationship who choose to enter into a separation agreement, as provided for in the De Facto Relationship Act, rather than obtain a court order, are not eligible for exemption from stamp duty. This is inequitable as couples entering into a separation agreement usually choose this option to settle their affairs as it is considerably less expensive than obtaining a court order. The bill will provide for an exemption from stamp duty on a separation agreement, and any documents pursuant to it, when evidence is produced to indicate that the parties to the de facto relationship have terminated that relationship at least three months prior to the lodgment of the documents for stamping. This amendment will bring the provisions relating to the transfer of property following the breakdown of a de facto relationship more into line with those relating to marriage breakups while at the same time ensuring that separation agreements are not used to convey property when no termination of the relationship is contemplated.
Under the current provisions, nominal duty is assessed in respect of an instrument of appointment in favour of persons specially named or described as the objects of a power of appointment contained in a conveyance, on which ad valorem duty has been paid, or in a will. This concession should only apply where ad valorem duty has been paid on the conveyance establishing the trust or power and that property, or a direct re-investment of the proceeds, is being conveyed to the appointee or beneficiary. As an anti-avoidance measure, the bill amends the trust provisions of the Act to ensure that ad valorem duty is paid at least once on the original trust property or the re-investment of that property. The Crown Solicitor has advised that the refund provisions for overpaid stamp duty require clarification. Furthermore, the Crown Solicitor has suggested that the provisions for objections to assessments need strengthening to provide an explicit authority for any refund necessary following a decision on an objection.
In order to ensure that all refunds from stamp duty can be properly made, the Stamp Duties Act is being amended to provide the Chief Commissioner with authority to refund overpayments of duty within two years of payment, subject to a discretion in respect of duty paid by a taxpayer and then passed on to its customer and to provide that a refund shall only be made if the Chief Commissioner is satisfied that the customer who ultimately paid the duty will receive the refund. It will provide the Chief Commissioner with authority to appropriate duty where duty has been overpaid on one transaction and underpaid on another. It will provide the Chief Commissioner with authority to reassess the duty payable within two years of the date of the original assessment. It will provide for amendment to the objection provisions to provide an authority for any refund necessary following a decision on an objection. It will provide that no refund should be payable if the assessment or return payment was made in accordance with the Chief Commissioner's interpretation of the Stamp Duties Act at the time of the assessment or return payment.
Bill facility arrangements are frequently used for providing financial accommodation to large borrowers and a financier will accept or endorse a bill of exchange for a customer to facilitate a sale of the bill to a third party. A loan security instrument is given to protect the exposure of the financier. There has been some argument that the current bill facility definition is deficient and does not encompass the types of transactions for which it was originally intended. The bill amends these provisions to clarify where duty is payable and ensure that there is no revenue leakage due to varying interpretations of the Act. Loan security duty is payable by the borrower
on advances of funds made under or secured by instruments such as mortgages and company charges. As a general rule, when a borrower refinances through another lender, the borrower will give that lender a new mortgage and ad valorem duty is payable on the amount advanced by the new lender. However, there are a number of different methods used in the practice of refinancing which result in differing levels of stamp duty liability. Because of this and the potential for loss of revenue, the bill will amend the principal Act to ensure that loan security duty will be payable except where the transaction is instigated by the lender. The current exemption provisions in respect of refinancing by primary producers will not be affected by this amendment.
In 1982 the Stamp Duties Act was amended to prevent the widespread avoidance of conveyance duty through the use of trusts and creative conveyancing practices. These amendments have been effective in controlling avoidance practices, however, they have placed restrictions on transfers to new or additional trustees particularly where non-profit organisations or clubs are involved. The current provisions require that, in order to attract nominal duty, conveyances reflecting changing trustees must be, among other things, pursuant to a specific document which is liable to nominal duty. Many small organisations, such as clubs, do not execute documents reflecting changes in trustees but record them in other forms, such as letters or meeting minutes, thus falling outside the current concessional rate requirements. The bill relaxes this restriction to allow the concessional rate of duty on a conveyance which is pursuant to any instrument recording the appointment of new or additional trustees or the retirement of existing trustees.
This amendment will also benefit trustee companies who hold securities and other assets for clients as they will no longer be required to execute documents which attract nominal duty in order to gain a concession from the ad valorem rate of duty when changing trustees. The bill will also amend the trust provisions to allow for marketable securities to be transferred to a trustee without the payment of ad valorem duty provided that the Chief Commissioner is satisfied that the transfer was not effected to change the beneficial ownership or in contemplation of the change in beneficial ownership in the marketable securities. Also, marketable securities held by a manager or trustee will be able to be transferred to a custodian without incurring ad valorem duty, enabling the commercial practice of nomineeing shares to operate more freely on those securities with a New South Wales nexus. It is expected that there will be no significant effect on revenue as a result of these amendments.
For some time there has been some doubt as to whether community tenancy scheme tenants are eligible for the exemption from stamp duty available to Department of Housing tenants on the purchase of a property and the associated mortgage. While community tenancy scheme tenants must be on the Department of Housing waiting list for accommodation and are eligible for low interest loans, if they wish to buy a property they are not strictly Department of Housing tenants and therefore do not fall within the exemption provisions. This situation has placed community tenancy scheme tenants at a disadvantage to those already living in Department of Housing rental accommodation when purchasing a home. In order to overcome this anomaly, the Premier and Treasurer approved of the Stamp Duties Act being administered on the basis that community tenancy scheme tenants be given the same concessions as Department of Housing tenants. The bill amends the Stamp Duties Act to validate this variation to statute.
The Stamp Duties Act currently provides that a loan security taken out by a participant of the First Home Purchase Scheme is exempt from loan security duty. Likewise, a tenant of the Department of Housing or a Community Tenancy Scheme is also eligible for an exemption from stamp duty on a loan security taken out to purchase
a property. However, some lenders to these purchasers require additional security for the loans made, which is usually a loan security over another property such as a parent's home. Under the existing provisions of the Act, such an additional loan security attracts full loan security duty, creating an inequitable situation. To overcome this anomaly, the Premier and Treasurer approved of the Stamp Duties Act being administered on the basis that any additional loan security to secure a loan obtained by a participant in the First Home Purchase Scheme or a tenant of the Department of Housing or a Community Tenancy Scheme, is exempt from stamp duty. The bill will amend the Stamp Duties Act to validate this variation to statute.
Under the current provisions of the Stamp Duties Act residential leases not exceeding five years are exempt from stamp duty and there is a general exemption from duty on leases where the annual rent does not exceed $3,000 per annum. However, there are no similar provisions for the lease of relocatable homes and home sites. While some of these leases may fall within the above categories, many others would not. As a result of concerns raised by my colleague the Minister for Housing in respect of this issue, the Premier and Treasurer approved of the Act being amended to extend the current exemption for residential leases for a term of no more than five years, to include a lease of a site or a relocatable home in a caravan or relocatable home park where it is to be used as the principal place of residence of the lessee.
Stamp duty is payable on the issue of a motor vehicle certificate of registration as a result of the purchase of either a new or used vehicle. However, instances occur where persons have purchased motor vehicles which were stolen prior to that purchase. Persons who buy motor vehicles from licensed dealers obtain a guarantee to the title and can recover the purchase price if the vehicle is subsequently found to have been stolen, but there is no provision in the Stamp Duties Act for these persons to obtain a refund of the stamp duty paid on the motor vehicle certificate of registration. The bill will amend the Act to allow for the stamp duty to be refunded within one year from the date of purchase if the vehicle is repossessed from the current owner as a result of having been previously stolen. Under the current stamp duty provisions, documents stamped by the Chief Commissioner can be liable to further duty, if a court subsequently disagrees with the Chief Commissioner's stamping. In order to provide better protection for taxpayers, the bill will amend the Act to provide that the stamping of a document by the Chief Commissioner is to be regarded as an assessment and it cannot be questioned unless there is an objection or appeal against it. The bill will make a number of other miscellaneous amendments to the principal Act. I commend the bill.
Debate adjourned on motion by Mr J. H. Murray.
That this bill be now read a second time.