Buying a business

When you buy a business in NSW, you only need to pay transfer duty if the sale includes land or an interest in land, such as a lease.

If the sale does include land or an interest in land, you may also need to pay transfer duty on the assets used to operate the business. This could include assets such as warehouse equipment or office computers.

Transfer duty is due three months after you sign the business sale agreement.

Assets included in transfer duty assessment

A business is any activity you do regularly with the aim of making a profit.

It doesn’t need to be a company, corporation, partnership or have any formal organisation – it can be any size. For example, selling homemade jam at a local market each Sunday is considered a business.

To work out the value of the business you’re buying for transfer duty purposes, you’ll need to include

• the value of any land or property
• the value of any interest in land, such as a lease
• the value of any plant or equipment
• any shares or units
• any goods that aren’t stock in trade, under manufacture or excluded from transfer duty.

In some cases, you may also need to pay $10 transfer duty for any

• sale of business agreement
• duplicate sale of business agreement
• transfer of lease
• transfer in conformity to the agreement.

Read more about which assets you need to pay transfer duty on in section 11 of the Duties Act 1997.

Excluded assets

You generally won’t have to pay transfer duty on

• any goods that are stock-in-trade
• manufacturing materials or anything under manufacture
• assets used on land for primary production
• livestock
• registered vehicles
• ships or vessels.

The exception is where these assets are tied to the property and cannot be moved or transferred.

From 30 June 2016, you also no longer have to pay transfer duty on

• gaming machines
• intellectual property used in NSW
• licences or permissions under NSW law or Commonwealth law if used in NSW, such as a taxi licence or water access licence
• the goodwill of a business, if it supplies goods or services in NSW.

You will still have to pay transfer duty on these assets if your agreement is replacing one made before 1 July 2016 for the same business property and assets.

You also won’t need to pay any transfer duty if goods, rather than land or an interest in land, make up more than 90% of the value of the sale.

Buying land and assets under separate contracts

Transfer duty is calculated as though it is one transaction when land and business goods are sold under different agreements, but as part of the same arrangement. This includes

• agreements containing an inter-dependency clause or
• where the parties entered into options before making the final agreements.

The buyers and sellers don’t need to be the same parties on each agreement for it to be considered the same arrangement.

Calculating transfer duty

The easiest way to work out how much transfer duty you'll need to pay is by using our online calculator.

Calculate your transfer duty

Contact us

Contact us for more information on buying a business and paying transfer duty.