Key reforms to NSW duty and land tax regime took effect from 1 February 2024.

Key reforms to NSW duty and land tax regime took effect from 1 February 2024. The amendments are included in the Treasury and Revenue Legislation Amendment Bill 2023 which received assent as Act No 26 of 2023 on 27 September 2023.

Corporate reconstructions and consolidations concession

Prior to 1 February 2024, eligible corporate reconstruction and corporate consolidation transactions were exempt from duty.

This provides relief from:

  • Duty on intragroup transactions enabling a corporate group to reorganise its business structure, for example by transferring assets between corporations that are members of the corporate group
  • Duty on corporate consolidation such as interposing a head corporation between a corporation that is a member of a corporate group and the shareholders or unitholders of that corporation

From 1 February 2024, the above exemption from duty will be replaced with a concessional duty of 10% (i.e., a 90% discount).

Acquisition threshold for private unit trusts decreased to 20%

Landholder duty is charged on acquisitions of a significant interest in private companies and unit trusts that directly or indirectly hold NSW land with an unencumbered value of $2M or more.
For acquisitions made on or after 1 February 2024, amended thresholds will apply. From 1 February 2024, significant interest means that if all the property is distributed, you are entitled to receive:

  • 50 per cent or more of the property in a ‘private company’, or
  • 20 per cent or more of the property in private unit trust schemes other than registered wholesale unit trust or imminent wholesale unit trust schemes, or
  • 90 per cent or more of the property in a ‘public landholder’

Transactions hat involve acquisitions of 20% or more of a trust need to consider whether the trust holds NSW land with an unencumbered value of $2M or more.

Land Tax: Changes to the principal place of residence exemption

From 1 February 2024, persons who purchase and occupy a property but own less than 25% interest (either solely or combined) will not be entitled to the principal place of residence exemption from the 2025 land tax year onwards.

Transitional provisions may apply until the 2026 land tax year for existing homeowners, and those who purchase a property and claim the exemption by 31 January 2024.

The minimum 25% ownership requirement will then apply to those owners from the 2026 land tax year.

 

Expertise and support when you need it.

Should you need any assistance or professional advice concerning these and other tax measures, please make a time for a chat with a Bentleys business advisor. We can help you to get where you want to be.

 


Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.