Gig workers can be considered independent contractors or employees, or sometimes the platform operator is classed as an employment agent. It depends on the business structure and the workers’ employment relationship. Click the arrow to read the new ‘Gig economy businesses’ page.
The New South Wales (NSW) Treasurer, The Hon. Dominic Perrottet MP, announced the following changes to State taxes and grants as part of the 2017 State Budget.
From 1 July 2017 the First Home New Home scheme will be replaced by the First Home Buyers Assistance scheme.
First home buyers will not have to pay duty for both new and existing homes for properties up to $650,000. The duty will be reduced for amounts between $650,000 and $800,000. There is no change to the cap for vacant land.
When does the duty exemption for first home buyers apply?
The exemption for first home buyers will apply to contracts executed on or after 1 July 2017 for properties up to $650,000. For properties valued between $650,000 and $800,000, duty concessions will apply.
Are there any changes for vacant land?
There are no changes to the cap for vacant land.
Does this apply only to new homes?
No, the exemption applies to new and existing homes purchased by first home buyers.
Does the 1 July 2017 date refer to the date the contracts were exchanged or settled?
The 1 July 2017 date refers to the date the contracts were exchanged.
Does a first home purchase refer to a first investment home purchase or the first owner-occupied home purchase?
First home purchase refers to the first home you purchase which you must occupy for a continuous period of 6 months, commencing within 12 months of settlement.
I have just settled, what can I do to get the benefits?
If you settled before 1 July 2017, you are only entitled to the benefits that were available at that time. Please check our website for more information.
Can I rescind the contract and enter into a new contract after 1 July 2017 and get the new benefits?
As your contract is already executed, you are liable to pay duty. If you rescind and enter into the contract for the same property after 1 July 2017 you will not be eligible for the new benefits.
My client has just exchanged contracts and is in the cooling off period. Can we rescind under the cooling off provisions and re-exchange later?
As your contract is already executed, you are liable to pay duty. If you rescind and enter into the contract for the same property after 1 July 2017 you will not be eligible for the new benefits.
My contract is dated before 1 July 2017. Are these changes retrospective?
No, the changes to the First Home Buyers Assistance scheme are not retrospective.
Does this mean yet another form? Will we need to complete another Declaration or a Statutory Declaration?
No additional forms are anticipated at this stage. However some existing forms will need to be modified and in the case of the new scheme the old form will be replaced with a new one.
If the parties entered into a Put & Call option before 30 June 2017 to be exercised after 30 June 2017, would the purchaser be able to claim the exemption (or reduction as applicable) or would the Option be the determining date?
If the exercise of the option occurs on or after 1 July 2017, you will be able to claim the new exemption or reduction.
Shared Equity Scheme
From 1 July 2017, the shared equity scheme applies where a home buyer purchases a property with an approved equity partner. This scheme helps people who may not otherwise be able to afford their home on their own to become a home owner by purchasing with an equity partner.
Guidelines on the operation of this scheme will be developed.
The shared equity scheme is a scheme where:
the home buyer must acquire not less than a 20 per cent share in the ownership of the property
the equity partner has the right to a share in any capital gains on sale or refinancing but has no right of occupation
the home buyer can purchase more equity in the property from the equity partner at a price determined under the arrangement between the home buyer and the equity partner.
Any subsequent transfers of equity from the equity partner to the home buyer will be exempt from further duty.
If the dutiable value of the property meets the requirements of the First Home Buyers Assistance, the home buyer will be entitled to the exemption or concession.
A home owner may be entitled to the first home owner grant if the total purchase price falls under the cap and all other conditions of the scheme are met.
The home buyer must acquire not less than a 20% share in the ownership of the property. The equity partner has a right to share in any capital gains on sale or refinancing but have no right to occupy the home. The home buyer can purchase more equity from the equity partner with no additional duty.
If I have an equity partner am I entitled to the First Home Buyers Assistance Scheme and the First Home Owner Grant?
If the purchase price of the property meets the requirements for the First Home Buyers Assistance Scheme, you will be entitled to the exemption or concession and if the total purchase price meets the cap for first home owner grant and all conditions of the grant are met, you will be entitled to the grant.
Does this scheme replace the shared equity arrangements where I could purchase my first home with another person who is not approved?
The shared equity scheme does not replace the shared equity arrangements. That scheme is still available.
If I purchase my first home under a Shared Equity Scheme, will I still have to pay land tax?
The principal place of residence exemption will be extended to land used and occupied by an owner under a shared equity scheme as defined above. The exemption will apply from the 2018 tax year.
New Home Grant Scheme
The New Home Grant scheme, providing a $5,000 New Home Grant will close on 30 June 2017.
Are there any changes to the First Home Owner Grant (New Homes) scheme?
Yes. On and from 1 July 2017, the eligibility cap has been decreased from $750,000 to $600,000. This applies to contracts to purchase new homes, entered into on or after 1 July 2017. The cap of $750,000 still remains in case of comprehensive home building contracts to build a new home, or the building of a home by an owner builder.
Will I get the Grant if I purchased vacant land and am building a new home for a total cost of $740,000?
Yes, if you are building a new home you will receive the $10,000 grant. The cap for building a new home is still $750,000.
If I exchanged contracts before 1 July 2017 and settled after 1 July 2017 and the purchase price was greater than $600,000 but less than $750,000 would I be eligible for the grant?
Yes, you would be eligible for the grant because your contract was executed before 1 July 2017.
If I purchase an existing home would I be eligible for the Grant?
No, the Grant is only available for new homes or the building of a new home, not an existing home.
Purchases 'off the plan' by investors
From 1 July 2017, all residential purchases by investors will be excluded from the 12 month off the plan transfer duty liability deferral.
Purchasers who wish to obtain the deferral will need to declare an intention to occupy the property as their principal place of residence (PPR).
If a purchaser claims an entitlement to the deferral, but the land is not occupied as the purchaser’s PPR for a continuous period of 6 months, commencing no later than 12 months after completion of the sale or transfer, interest and penalty tax may apply from the liability date.
If I am an investor and I enter into an off the plan purchase agreement would I be eligible for the 12 month deferral of my liability?
If you enter into an off the plan purchase agreement on or after 1 July 2017, you would not be eligible for the 12 month duty deferral. You will need to pay duty within 3 months from the date of the contract.
If I am a purchaser and I wish to get the deferral, what do I do?
If you are a purchaser and you wish to get the deferral, you must declare your intention to occupy the property for a continuous period of 6 months, commencing within 12 months from the completion of the sale or transfer.
What if I don’t meet the residence requirement?
If you don’t meet the residence requirement, duty together with interest and penalty tax may apply from the normal liability date.
Land tax
Principal place of residence
The principal place of residence exemption will be extended to land used and occupied by an owner under a shared equity scheme as defined above. The exemption will apply from the 2018 tax year.
Surcharge purchaser duty
Rate of duty
From 1 July 2017, the surcharge purchaser duty rate will increase from 4 per cent to 8 per cent.
Permanent residents (including New Zealand citizens)
From 20 June 2017, permanent residents, including New Zealand citizens holding a Special Category visa (subclass 444), will be exempt from surcharge purchaser duty on their principal place of residence, if they occupy the home for a continuous period of 200 days within 12 months of purchase.
The exemption will be granted if the person declares that they will complete the 200 day residence requirement.
Australian-based developer
An Australian-based developer may be entitled to a refund of surcharge purchaser duty if they are an Australian corporation. This applies to an eligible developer who acquired land on or after 21 June 2016. The corporation or a related body corporate of the corporation must have constructed a new home on the residential land to which the residential-related property relates after completion of the transfer of the property to the corporation.
The proportion of surcharge purchaser duty refunded will be based on the proportion of dwellings sold (other than to an associated person) within 5 years of the completion of the purchase of the land by the developer. Where separate dwellings are sold progressively over the 5 year period, a developer may be granted partial refunds.
Guidelines will be provided by way of an order made by the Treasurer.
A refund will be payable in respect of the sale of a new home. A dwelling that has been rented or occupied at any time while owned by the developer is not eligible for a refund.
Commercial residential property
Commercial residential property will be exempt from surcharge purchaser duty.
The Chief Commissioner will make a determination identifying classes of commercial residential property.
When does the surcharge purchaser duty rate increase and by how much?
The surcharge purchaser duty rate will increase for residential property acquired by a foreign person on or after 1 July 2017. The rate will increase from 4 per cent to 8 per cent.
If I am an Australian-based developer do I pay surcharge purchaser duty?
If you are an Australian-based developer you will pay surcharge purchaser duty when you purchase the land. However, you will be entitled to a refund on the sale of a new home to a person who is not associated to the corporation.
When does the exemption for Australian-based developers take effect?
Once the legislation is enacted, this exemption will be retrospective and will take effect from 21 June 2016.
Are commercial residential properties exempt from surcharge purchaser duty?
Yes, commercial residential properties (e.g. purpose built student accommodation) will be exempt from surcharge purchaser duty.
What does commercial residential property mean?
Guidelines will be issued to identify classes of commercial residential property that will be exempt.
I am a New Zealand citizen with a Special Category visa (subclass 444), am I exempt from surcharge purchaser duty on my principal place of residence?
If you are a New Zealand citizen who holds a Special Category visa (subclass 444), you will be exempt from surcharge purchaser duty if you reside in the property as your principal place of residence for a continuous period of 200 days commencing within 12 months from the liability date.
I am a permanent resident, am I exempt from surcharge purchaser duty?
If you are a permanent resident, you will be exempt from surcharge purchaser duty if you reside in the property as your principal place of residence for a continuous period of 200 days commencing within 12 months from the liability date.
Surcharge Land Tax
Rate of tax
From the 2018 tax year, the surcharge land tax rate will increase from 0.75 per cent to 2 per cent.
Permanent residents (including New Zealand citizens)
From the 2018 tax year, permanent residents, including New Zealand citizens holding a Special Category visa (subclass 444), will be exempt from surcharge land tax on their principal place of residence, if they occupy the home for a continuous period of 200 days in the land tax year.
The exemption will be granted if the person declares that they will complete the 200 day residency requirement.
Australian-based developer
An Australian-based developer may be entitled to a refund of surcharge land tax if they are an Australian corporation. The corporation or a related body corporate of the corporation must have constructed a new home on the residential land and after the taxing date, the corporation must have sold the new home to a person other than an associated person of the corporation.
The proportion of surcharge land tax refunded will be based on the proportion of dwellings sold (other than to an associated person) within 5 years of the completion of the purchase of the land by the developer. Where separate dwellings are sold progressively over the 5 year period, a developer may be granted partial refunds.
The exemption is retrospective to an eligible company.
In cases where the land was acquired before 21 June 2016, the 5 years commences from 21 June 2016
If land was acquired after 21 June 2016, the 5 years commences from time the land was acquired.
Guidelines will be provided by way of an order made by the Treasurer.
A refund will be payable in respect of the sale of a new home. A dwelling that has been rented or occupied at any time while owned by the developer is not eligible for a refund.
Commercial residential property
From 2018 tax year, commercial residential property will be exempt from surcharge land tax.
The Chief Commissioner will make a determination identifying classes of commercial residential property.
Surcharge land tax rate will increase from 0.75 per cent to 2 per cent for the 2018 tax year. For the 2017 tax year the rate will still be 0.75 per cent.
If I am an Australian-based developer do I pay surcharge land tax?
If you are an Australian based developer you will be exempt from surcharge land tax upon the sale of a new home to a person who is not associated to the corporation. If you have already paid surcharge land tax, a refund may apply.
This exemption is retrospective and will take effect from 21 June 2016.
Are commercial residential properties exempt from surcharge land tax?
Yes, commercial residential properties will be exempt from surcharge land tax.
What does commercial residential property mean?
Guidelines will be issued to identify classes of commercial residential property that will be exempt.
I am a New Zealand citizen with a Special Category visa (subclass 444), am I exempt from surcharge land tax?
If you are a New Zealand citizen, who holds a Special Category visa (subclass 444), you will be exempt from surcharge land tax if you reside in the property as your principal place of residence for a continuous period of 200 days after the taxing date and before the end of the relevant tax year.
I am an Australian permanent resident who is not a New Zealand citizen, am I exempt from surcharge land tax?
You will be exempt from surcharge land tax if you reside in the property as your principal place of residence for a continuous period of 200 days after the taxing date and before the end of the relevant tax year.
Insurance duty
Lenders Mortgage Insurance (LMI)
From 1 July 2017, an LMI policy will be exempt insurance in NSW meaning an insurer who issues a LMI policy will no longer need to pay duty on this premium where the policy is over property in NSW.
LMI means insurance taken out by lenders to cover loss arising from default by the mortgagor.
Is the Lenders Mortgage Insurance only for first home buyers?
No. This saving will apply to all borrowers where a Lenders mortgage insurance policy is taken out.
What if I am asked to pay duty on LMI after 1 July 2017?
There may be situations where a quote has been provided for a LMI policy prior to 1 July 2017 and this quote includes an amount for NSW duty even though settlement on the purchase of the property will not take place until after 1 July 2017 and the LMI policy for the purchase is exempt from duty. The Government is working with insurers and lenders to ensure that such amounts are returned to borrowers.
There may also be times where the security provided for the loan includes property in another State or Territory. Insurance duty may still be payable in that State or Territory on the LMI policy and this cost may be passed on to the borrower.
How do I know if I am entitled to a refund from my lender if the settlement of my loan occurred on or after 1 July 2017?
For LMI that come into effect on or after 1 July 2017, duty will no longer apply. However, if the settlement of your loan occurred on or after 1 July 2017 and you are unsure whether you are entitled to a refund from you lender, you should contact your lender to discuss your situation.
If I am entitled to a refund from my lender, who should I contact to arrange my refund?
If you are entitled to a refund from your lender, you should contact your lender to discuss your situation.
What if I’m an insurance company and have paid Revenue NSW duty on LMI policies effected on or after 1 July 2017?
It is anticipated that insurers will not pay Revenue NSW any duty on LMI policies effected on or after 1 July 2017. The Duties Act contains provisions that enable Revenue NSW to offset a payment where an amount has been refunded to the insured or the borrower. Revenue NSW is unable to provide a refund to a lender or borrower.
Can an insurance company request a refund for any duty paid on LMI policies effected or renewed before 1 July 2017?
No - the exemption only applies to insurance policies effected on or after 1 July 2017.
Where can I find out more information about lenders’ mortgage insurance?
Find out more about lenders’ mortgage insurance by reading the Insurance Council of Australia’s LMI Fact Sheet.
Crop and Livestock Insurance
From 1 January 2018 crop and livestock insurance will not be liable to duty.
I have a policy that takes effect in December 2017 but the premium is not due until January 2018. Is this policy liable to duty?
Yes, as the policy is effected prior to 1 January 2018 it will remain liable for duty. It does not matter when the premium is paid.
What if the premium is being paid in instalments?
If a policy is effected or renewed before 1 January 2018 it will remain liable for duty. It does not matter if the premium is paid before or after 1 January 2018 or if the premium is paid in instalments.
What if I am asked to pay duty on a policy effected on or after 1 January 2018?
If the policy covers crop and/or livestock insurance as well as other risks, then the premium will require apportionment between the different types of risks to determine the duty payable on the part of the premium that relates to the other risks.
Similarly, if the policy applies across multiple States or Territories then the premium will require apportionment in order to calculate any duty payable for each State or Territory.
What if I took out crop or livestock insurance before 1 January 2018, can I receive a refund?
No. The exemption only applies to insurance policies effected or renewed on or after 1 January 2018.
Small business exemption
From 1 January 2018, certain types of general insurance are exempt from duty provided that the insured person is a CGT small business.
How would an insurer know I am a small business so I am not charged duty on my policy?
An insurer will require the insured to provide a small business declaration. This is a declaration by the insured, in writing, to the effect that the person is a small business at the time that the contract of insurance is effected or renewed.
What happens if I claim the small business exemption I am not entitled to?
In addition to a penalty of up to $11,000 the insured may be required by the insurer to pay to the insurer an amount equal to the duty, together with any interest or penalty tax payable. The insurer may recover this amount as a debt if the amount is not paid.
What if I took out the insurance before 1 January 2018, can I receive a refund?
No. The exemption only applies to insurance policies effected or renewed on or after 1 January 2018.
What if the policy covers multiple risks?
If the policy covers multiple types of insurance, then the premium will require apportionment between the different types in order to determine the duty payable.
Similarly, if the policy applies across multiple States or Territories then the premium will require apportionment in order to calculate any duty payable for each State or Territory.
What if the premium is being paid in instalments?
If a policy is effected or renewed before 1 January 2018 it will remain liable to duty. It does not matter if the premium is paid before or after 1 January 2018 or if the premium is paid in instalments.
What if I am a small business and my insurance policy shows I am being charged duty after 1 January 2018?
A small business is not liable to duty for certain types of Insurance where the premium is paid on or after 1 January 2018. The policy may include multiple types of insurance which may not always be clear. Duty will continue to apply to other types of insurance and this may be why you will still see duty on your policy after 1 January 2018. Contact your insurer if you require further information.
Fire and Emergency Services
The Budget legislation includes the Emergency Services Levy Bill 2017 which will defer the introduction of the Fire and Emergency Services Levy (FESL) to ensure small to medium businesses do not face an unreasonable burden in their contribution to the State's fire and emergency services.
The NSW Government will work with local government, fire and emergency services, the insurance industry and other stakeholders to find a better and fairer path forward.
The Bill continues the current scheme for collection of the Fire and Emergency Services Levy through insurance policies until the NSW Government has completed its review of the policy, and the funding requirements of fire and emergency services agencies will be met in full.
The Emergency Services Levy Insurance Monitor will oversee a smooth continuation of the existing system and ensure insurance companies collect only the amounts necessary to meet fire and emergency services funding requirements.