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Abolition of NSW Mortgage Duty

Mortgage duty in NSW is abolished on 1 July 2016.

Duty is not payable on mortgages executed on or after 1 July 2016.

Duty is not payable on advances made on or after 1 July 2016, irrespective of the date of the mortgage.

Mortgages are not required to be stamped or marked in respect of any of the above and can be registered at Land and Property Information without such stamping or marking.

Mortgage executed before 1 July 2016, initial advance made on or after 1 July 2016

Duty of $5 is payable on the mortgage and up stamping is not required when the advance is made.

Caveats

The liability of a caveat is determined by the date of the unregistered mortgage over which the interest is claimed.

If the unregistered mortgage is first executed prior to 1 July 2016 the caveat is liable to:

  1. duty of $50 if the mortgage is stamped or not chargeable with duty; or
  2. the same duty that is payable on the mortgage if the mortgage is not stamped.

If the mortgage is first executed on or after 1 July 2016, no duty is payable on the caveat and it does not need to be stamped or marked.

Collateral mortgages

No duty is payable on a collateral mortgage executed on or after 1 July 2016 which is collateral to a mortgage executed before 1 July 2016. The collateral mortgage does not need to be stamped or marked.

A collateral mortgage executed prior to 1 July 2016 to secure an advance to be made on or after 1 July 2016 is to be stamped $50 and marked collateral to the amount secured by the earlier (‘prime’) mortgage.

Refinancing mortgages

No duty is payable on a refinancing mortgage first executed on or after 1 July 2016 which refinances an advance secured by a mortgage dated before 1 July 2016.

A refinance mortgage executed prior to 1 July 2016 to secure an advance to be made on or after 1 July 2016 can be stamped exempt from duty under section 220 of the Act, if the refinancing criteria apply. If the amount refinanced exceeds the amount to which the earlier mortgage was stamped, or exceeds $1 million, duty of $5 would be payable on such mortgage.

Multi-state mortgage packages

Mortgages executed on or after 1 July 2016 which form part of a mortgage package with mortgages dated before 1 July 2016 do not need to be stamped.

No duty is payable on advances made on or after 1 July 2016 in relation to mortgage packages, irrespective of the date of the mortgages.

Duty is however payable on a new mortgage executed prior to 1 July 2016 even if the associated advance is not made until on or after 1 July 2016.

Example: 

A new NSW mortgage is executed prior to 1 July 2016 and forms part of a mortgage package with earlier mortgages. No further advance is made until on or after 1 July 2016.

What duty is payable on the new mortgage? The mortgage is liable to duty on the amount of liable advances secured as at the date of the new mortgage.

If duty has been paid in respect of those earlier mortgages the new mortgage would be stamped with duty of $50 as a collateral and marked to the amount secured by the earlier mortgages.

If the advances secured by the earlier mortgages were not chargeable because they were owner occupied or investment housing loans to natural persons, the new mortgage is not chargeable with duty and does not need to be stamped or marked.

If the earlier mortgage has not been stamped because it is an interstate mortgage, the new mortgage would be liable to mortgage duty on the NSW proportion of the amount of liable advances secured.

Reassessments and refunds

Reassessments and refunds can be processed up to 5 years after the date of liability

Replicas

A replica executed on or after 1 July 2016 to replace a mortgage executed prior to 1 July 2016 is liable to duty under section 272 of the Act.

Note: replica means an instrument that:

  1. is executed to replace, and
  2. contains the same terms as, but no other terms than, those contained in,a previously executed instrument that has been lost, spoiled or destroyed and that, in the Chief Commissioner’s opinion, has been duly stamped.
Last updated: 20 May 2016