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.
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
In some cases, you may also need to pay $10 transfer duty for any
Read more about which assets you need to pay transfer duty on in section 11 of the Duties Act 1997.
You generally won’t have to pay transfer duty on
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
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.
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
The buyers and sellers don’t need to be the same parties on each agreement for it to be considered the same arrangement.
Assets are not liable for transfer duty when you buy the business
Stock in trade
Assets are liable for transfer duty when you buy the business
Plant and equipment
The value you’d need to pay transfer duty on is the value of the property plus the value of the plant and equipment:
The easiest way to work out how much transfer duty you'll need to pay is by using our online calculator.
Contact us for more information on buying a business and paying transfer duty.