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Calculate dutiable value

Transfer of land or business duty

Business asset

How is the value of a business asset is determined?

The value of a business asset, including goodwill and intellectual property, is determined by using the following formula:

DV = A x X/Y

Where:

DV = dutiable value.

A = the unencumbered value of the business asset or the consideration for the transaction as relates to the business asset, whichever is the greater.

X = the gross amount of goods supplied and services provided in New South Wales by the business to customers, during the last three completed financial years preceding the transaction.

Y = the gross amount of goods supplied and services provided, in and outside New South Wales by the business to customers, during the last three completed financial years preceding the transaction.

What items do not attract duty when buying a business?

When buying a business the items that do not attract duty are:

  • goods that are stock-in-trade

  • materials held for use in manufacture

  • goods under manufacture

  • goods held or used in connection with land used for primary production

  • livestock

  • a registered motor vehicle

  • a ship or vessel

  • items not classified as 'dutiable property'

For more information on transactions relating to goods and other property, see Revenue ruling DUT 004.

Will I be required to provide evidence of the value?

In general, you are required to provide evidence of value if:

  • there is no consideration or a nominal consideration

  • the Chief Commissioner is not satisfied that the consideration is an adequate indication of the unencumbered value of the property.

Evidence of value will usually be sought to verify the accuracy of the consideration in the following circumstances:

  • the parties are associated persons not acting at arm's length

  • in the case of an agreement for sale, there is no selling agent and the same legal firm is acting for both parties

  • the transaction relates to fractional interests in property

  • the consideration appears low for the type of property being sold.

When is a valuation report required?

Evidence of value is required as at the date of exchange or execution of the document, although evidence of value within three months of that date will be accepted in most cases.

If the evidence of value is at a date more than three months from the transaction date, it may be accepted provided there has been no change affecting the value of the property during that time.

In the case of land, evidence of value more than three months and up to 12 months from the date of the transaction will be accepted if accompanied by a statutory declaration stating that no improvements have been effected, nor any zoning changes or lifting of restrictive conditions made by Council, between the date of the valuation and the date of the dutiable transaction.

The period of 12 months referred to above may be varied depending on the state of the property market and the location of the property. Generally, a period of 18 months will apply in the case of properties outside the metropolitan area.

For more information on valuations of property, see Revenue ruling DUT 012.

Partnership interest value

How is partnership interest value calculated?

The value of a partnership issue is determined by using the following formula:

DV = A x X/Y

Where:

DV = dutiable value.

A = is the value of the partnership interest or consideration for the transaction as relates to the partnership interest, whichever is the greater

X = the unencumbered value of all dutiable property of the partnership

Y = the unencumbered value of all assets of the partnership.

Where the assets of the partnership include land or land related assets and duty is paid separately on the transfer of the land, 'X' is to be reduced by the unencumbered value of the interest in the land transferred.

Note: Financial statements and capital accounts of the partnership or land related assets must be lodged with the document or a valuation of the business.

For more information, visit the Partnership interests page.

Partition

How is the value of a partition determined?

The value of a partition is the greater of:

  • the sum by which the value of the land transferred to a person exceeds the value of the interest in the land held by the person immediately before the partition

  • the sum of any consideration for the partition paid by any of the parties.

The minimum duty charged on a document that affects a partition is $50.

For more information, see Revenue ruling 35 - Partitions of land.

Last updated: 19 May 2016