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Landholder duty guide

This guide centralises key information on landholder duty and provides industry professionals the legislative and operational requirements under chapter 4 of the Duties Act 1997 – Acquisition of interests in landholders.

For a comprehensive understanding, it is recommended that the guide is read in its entirety.

Chapters

4. Calculating landholder duty

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Calculating landholder duty

Landholder duty is charged at the same rate as transfer duty and is calculated on the unencumbered value of the landholdings and goods of the landholder at the time a relevant acquisition is made. However in respect of goods, there is a specific provision for certain goods that are excluded from the calculation.

Where more than one acquisition was made within a ‘statement period’, duty is calculated on the unencumbered value of the landholdings and goods of the landholder at the time of each acquisition made in a ‘statement period’

Unencumbered value is the value of the property determined without regard to any encumbrance (i.e. mortgage) on the property.

A statement period is the period commencing three years before the date of the relevant acquisition and ending on the date of the relevant acquisition.

Private landholders

If you make a relevant acquisition in a private landholder, landholder duty will be charged on the unencumbered value of all NSW landholdings and goods multiplied by the proportion of the landholder you acquire.

If you make more than one acquisition in the statement period, duty will be calculated by taking into account the proportion of your combined interest in the landholder.

Duty will be reduced by the amount of duty paid in a previous acquisition within the statement period.

Public landholders

If you make a relevant acquisition in a public landholder on or after 1 July 2023, landholder duty will be charged on the unencumbered value of all the landholdings and goods of the landholder in NSW.

If there was a prior exemption, duty is calculated after deducting the proportion of the value of the interest acquired in the exemption acquisition (section 156(3) of the Duties Act 1997).

If the public landholder is a widely held trust, the duty payable is reduced by the amount of duty you’ve already paid in respect of the dutiable transaction including any duty paid in other jurisdictions (section 156(4) of the Duties Act 1997).

Once duty has been paid on a relevant acquisition by a person in a public landholder, further acquisitions made by that person in that public landholder will not attract duty.

Surcharge purchaser duty

If you are a foreign person, and you have made a relevant acquisition in a landholder that has an interest in residential land, you may also need to pay surcharge purchaser duty in addition to landholder duty.

For more information on Surcharge Duty visit the Surcharge Purchaser Duty Guide.

Exemptions, concessions and reduction in duty

Below is a selection of exemptions and concessions from Chapter 4, Part 4 of the Duties Act 1997.

Exempt acquisitions

Exempt acquisitions may include:

trustee changes under section 163A(1)(f) of the Duties Act 1997 (also see Revenue Ruling DUT 037)
where the interest acquired is as a result of the will of a person who has died (see section 163A(1)(d) of the Duties Act 1997).
where the interest is acquired in a landholder whose landholding comprises land used for primary production and the Chief Commissioner is satisfied that, had the landholder transferred the land to the person acquiring an interest as a result of the acquisition immediately before that acquisition, the transfer of the land would not be chargeable with duty under this Act because of the exemption for transfers between family members (see section 163A(1)(e) and section 274 of the Duties Act 1997).
where the interest acquired is as a result of the break-up of a marriage and other relationships (see section 163B of the Duties Act 1997)

To apply for an exemption, you need to lodge an acquisition statement within three months of your acquisition.

For a relevant acquisition made before 24 June 2020, email your request for the appropriate form to [email protected]

Concessions for primary producers

A primary producer is a landholder whose landholdings, anywhere in the world, wholly or predominantly comprise land used for primary production.

If you acquire an interest in a ‘primary producer’, to apply for a concession, you need to lodge an acquisition statement within three months of your acquisition.

Duty will not be charged in respect of an acquisition of an interest in a primary producer if, when the acquisition is made, the primary producer:

has landholdings in NSW with an unencumbered value of less than $2 million, and
its landholdings, anywhere in the world, make up less than 80 per cent of the unencumbered value of all its property.

If the landholder stops being a primary producer at any time within five years of the acquisition, the concession is withdrawn, and duty will be charged on the date when the landholder stopped being a primary producer.

Note: If the conditions of the concession are not satisfied, landholder duty is payable on your acquisition.

Reduction in landholder duty

For relevant acquisitions made on or after 1 February 2024, reduction in duty applies if the acquisitions were made in connection with approved corporate reconstruction and corporate consolidation transactions.

Refer to corporate reconstructions (section 273A and section 273B of the Duties Act 1997 and Revenue Ruling DUT 026)