Changes to Stamp Duty in the ACT
31 January 2017
On 15 December 2016, the Treasurer introduced reforms to the Duties Act 1999 and other Acts to implement a new system to collect stamp duty.
These changes to how stamp duty is collected, known as the ‘Barrier Free’ model, will make buying property simpler and more efficient because buyers will no longer pay stamp duty before settlement of a property.
Implementation of Barrier Free will be timed to coincide with the launch of the ACT Revenue Office’s new IT System. We expect this to be mid 2017.
Detailed information about transition and launch date will be available soon.
How is stamp duty changing?
The ACT Revenue Office currently processes all property contracts and application for concessions once the stamp duty has been paid. The transfer of the property is then registered at Access Canberra.
Under the new system, property buyers and solicitors will pay stamp duty after settlement when registering a title with Access Canberra. A Notice of Assessment will be delivered to the email or physical address nominated on registration.
You will have 14 days after registration to pay, payments can be made online.
What are the benefits?
The new system will minimise the number of interactions with the ACT Revenue Office, leading to faster turnaround for customers. Buyers will only have to lodge documents once at Access Canberra.
You no longer pay duty before settlement. Stamp duty will be paid after settlement within 14 days after registration of title.
For those applying for a concession, you don’t need to fill in detailed application forms or provide supporting documents unless they are requested by the ACT Revenue Office after the transaction is complete.
When will the changes take effect?
The implementation of the Bill will be timed with the launch of the ACT Revenue Office’s new IT system. This is expected mid 2017.
How do I pay duty?
Stamp duty can be paid when an assessment is issued after registration of the title. Unlike the current model, there is no ability to pay duty before settlement.
Will the amount I pay change?
No. Only the timing of payment changes, from the 90 day period after contract execution to a 14 day period after registration of title.
What if I am self-represented?
If you are not using a solicitor or agent, the same process will apply.
How will I know what concessions I am eligible for?
Check the ACT Revenue Office website under Home Buyer Assistance for relevant eligibility information.
The supporting legislation will consolidate several exemptions and convert all nominal duty ($20) concessions to full exemptions, making it easier to nominate the correct concession.
Will there be changes to home buyer assistance?
You are no longer required to submit an application for home buyer duty concessions.
If you are eligible for home buyer duty assistance, you can claim the concession and/or exemption on the documents lodged at Access Canberra.
Depending on the nature of the assistance and your personal circumstances, you may be contacted by the ACT Revenue Office after duty has been paid to verify your eligibility.
There are no changes to the First Home Owner Grant.
What are my responsibilities after payment?
You are required to keep proper records of the transaction under the Taxation Administration Act 1999. The ACT Revenue Office may contact you after payment to conduct a review of the transaction. The ACT Revenue Office may also review your eligibility after payment if you have claimed a concession.
A list of the required records will be made available on the ACT Revenue Office website.
What happens if I don’t pay?
Interest is charged on late payments of stamp duty. This process will not change with the new system. Penalty tax may be imposed in addition to interest if you have failed to meet obligations required by the law.
We will introduce robust options to recover unpaid duty as a secured debt against a property.
Can I still defer the payment of stamp duty?
Duty can still be deferred if you are a purchasing an eligible property and are eligible for the First Home Owner Grant or Home Buyer Concession Scheme.
Isn’t the Government reducing stamp duty anyway?
The new model is in line with the Government’s commitment to reduce stamp duty.
It prevents stamp duty from holding up the purchase of property, and will be easily removed from the process if and when stamp duty is phased out.
How are off the plan purchases affected?
Residential properties that are bought off the plan are currently subject to a different timeframe for payment (up to 1 year and 14 days after contract execution).
In the new system there will be no distinction between off the plan purchases and other contracts, and duty will not be payable before registration.
This means that there is no obligation to interact with the ACT Revenue Office until the settlement of the off the plan purchase agreement.
Will my data be protected?
Access Canberra will be authorised to collect information from property buyers on behalf of the ACT Revenue Office. This information will be protected by the Information Privacy Act 2014 and the confidentiality provisions under the Taxation Administration Act 1999.
Any information collected solely for stamp duty purposes will be covered by these strong privacy protections and will not be published on the land titles register.
How is my existing transaction affected under the new model?
Transitional provisions will be in place so that contracts executed before the commencement date are subject to the previous conveyancing rules. More information will be made available closer to the launch of the new system.
Will the changes apply to all transactions?
The vast majority of conveyancing transactions are registered on the land titles register and so will be subject to the new stamp duty collection system: for example, contracts for sale of real estate and grants of Crown leases.
A small number will sit outside the model because they do not cause a change in the land titles register: for example, declarations of trust, landholder acquisitions, or cancelled agreements giving effect to a sub-sale.
The ACT Revenue Office will make a direct electronic lodgement option available for these forms of transaction, and generally the existing timeframes for payment will not change.
There are also no changes to motor vehicle registration duty under these reforms.