Visit the key dates for payroll tax webpage and schedule these dates in your calendar to avoid missing lodgement dates and additional costs associated with late lodgement.
Learn more about becoming a shared equity partner approved by the Chief Commissioner of State Revenue, to support home buyers in purchasing property in NSW.
Transfer duty was abolished on business sale assets in 2016, however a sale of business remains liable to duty if there is an associated dutiable transaction. If the transaction involves land or an interest in land, such as a transfer of lease or assignment of lease, the sale of business will be dutiable.
Duty may also be payable on the value of certain goods which are included in the sale and are transferred or sold with other dutiable property. Goods are often described in agreements as equipment or plant and equipment. Examples of goods which are dutiable include:
Computers in an office
Tables and chairs in a restaurant
Cash registers in a retail store
Goods can be fixed assets (fixtures) or non-fixed assets (moveable). Fixtures cannot be removed without destruction, and are therefore considered an interest in land and are always liable to duty under section 11(1)(l) of the Duties Act 1997. Examples of fixtures include:
Permanently affixed plant and equipment (including machinery bolted to the floor)
Improvements that cannot be removed without material damage to the property
Structural improvements and building modifications
Non-dutiable property
On and from 1 July 2016 in NSW, transfer duty is not payable on:
goods held or used in connection with land used for primary production,
livestock,
a registered motor vehicle,
a ship or vessel
Certain transactions concerning goods and other property
Under section 26 of the Duties Act 1997, if a dutiable transaction involves goods and other dutiable property, the Chief Commissioner may disregard the value of the goods in the transaction if the dutiable value of the other property does not exceed 10% of the dutiable value of all the dutiable property in the transaction.
Calculating the dutiable value for a sale of business
For agreements for sale of business that can be processed through EDR, follow the steps below.
Before you begin
Identify dutiable and non-dutiable property.
Identify if plant and equipment are fixtures or moveable goods.
Fixtures: Items attached to the property (e.g. built-in cabinetry, air conditioning units)
Moveable goods: Items not permanently attached (e.g. furniture, appliances)
Apportion the value between fixtures and moveable goods. If the sale of business does not attribute value to each item of plant and equipment, this information can be provided by the vendor or an accountant.
Steps to calculate dutiable value
1
What is the total consideration for the purchase?
This is the Purchase Price
2
What is the value of the non-dutiable property?
This is the Non-Dutiable Value
3
Subtract the Non-Dutiable Value from the Purchase Price
Dutiable Value = Purchase Price - Non-Dutiable Value
4
Does the sale of business include moveable goods?
If no, transfer duty is calculated on the Dutiable Value If yes, determine whether section 26 of the Duties Act 1997 applies
Steps to determine whether section 26 of the Duties Act 1997 applies
5
Calculate 10% of the Dutiable Value
6
What is the value of the moveable goods?
This is the Goods Value
7
Subtract the Goods Value from the Dutiable Value
The result is the Value of the Other Property
8
Compare the Value of the Other Property (Y) and 10% of the Dutiable Value (Z)
If Y > Z
Do not disregard the value of the goods
Transfer duty is calculated on the Dutiable Value
If Y ≤ Z
Disregard the value of the goods
Transfer duty is calculated on the Value of the Other Property
Examples
Here are some common examples for how to calculate the dutiable value for a sale of business.
Step 3: The Dutiable Value = $900,000 - $200,000 = $700,000
Step 4: The sale of business includes moveable goods
Step 5: 10% of $700,000 = $70,000
Step 6: The Goods Value is $500,000
Step 7: The Value of the Other Property is $200,000
Step 8: Value of the Other Property > $70,000 = do not disregard the value of the goods
Result:
Transfer duty for the sale of business is calculated on the Dutiable Value ($700,000).
Buying land and assets under separate agreements
Under section 25 of the Duties Act 1997 aggregation of dutiable transactions may apply when you have two or more transactions that form part of what is essentially one larger transaction. When land and business goods are sold under different agreements, but as part of the same arrangement, transfer duty is calculated as though it's one transaction.
Some examples include:
agreements containing an interdependency clause
where the parties entered into an option arrangement before making the final agreements
Party A is buying a coffee shop from Party B. The sale of business includes the following assets:
Stock-in-trade $50,000
Plant and equipment $350,000
Intellectual property $100,000
The plant and equipment are moveable goods.
The sale is interdependent with an agreement for sale of land. The purchase price for the land is $1,000,000.
Stock-in-trade and intellectual property are not dutiable.
The plant and equipment are dutiable.
Calculation:
Step 1: The Aggregated Purchase Price is $1,500,000
Step 2: The Non-Dutiable Value is $150,000
Step 3: The Dutiable Value = $1,500,000 - $150,000 = $1,350,000
Step 4: The sale of business includes goods
Step 5: 10% of $1,350,000 = $135,000
Step 6: The Goods Value is $350,000
Step 7: The Value of the Other Property is $1,000,000
Step 8: Value of the Other Property > $135,000 = do not disregard the value of the goods
Result:
Transfer duty is calculated on the Dutiable Value ($1,350,000).
Generally, section 26 of the Duties Act 1997 will not apply when a sale of business is aggregated with an agreement for sale of land, as the land value typically exceeds 10% of the dutiable value of the transaction.
Assessing transfer duty on business transactions
The tables below demonstrate how duty is calculated on the purchase of a business.
The value of the moveable goods is > 90% of the dutiable value of all the dutiable property, and
No value has been attributed to the transfer of lease
Section 26 of the Duties Act will apply, and the value of the moveable goods can be disregarded. Transfer duty will be payable on the value of the fixtures.
No value has been attributed to the assignment of lease
Duty will be:
$20.00 on the deed of assignment of lease
$20.00 on the duplicate
Value has been attributed to the assignment of lease
Duty will be:
Ad valorem duty on the deed of assignment of lease
$20.00 on the duplicate
Transactions that must be submitted via eDuties
As referred to in the Duties Document Matrix (PDF, 509.03 KB), the following transaction cannot be processed through Electronic Duties Returns (EDR) and must be lodged via eDuties for assessment by Revenue NSW.
Sale of business between parties not at arms’ length
Sale of business that includes business assets in more than one jurisdiction
