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Transfer duty exemption for charitable organisations
Charities that acquire dutiable property in New South Wales are eligible for a transfer duty (stamp duty) exemption if they meet certain requirements.
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There are two types of transfer duty exemptions available to charitable and benevolent organisations for property transactions in New South Wales (NSW).
The general exemption applies to most property transactions by a charitable organisation. The exemption is granted for 3-year periods.
The transaction-specific exemption only applies to a single property transaction where the property is used for an approved purpose.
Eligibility requirements
The charitable exemptions apply to the following property transactions:
Transfers.
Surrenders.
Vesting.
Leases.
Acquisitions of an interest in a landholder.
Declarations of trust.
General exemption
The organisation will be exempt from paying transfer duty on most property transactions if it meets the following requirements:
Its resources are used wholly or predominantly for:
the relief of poverty in Australia, or
the promotion of education in Australia.
The organisation is non-profit with appropriate rules preventing profit distribution to members.
On dissolution, its assets would go to another organisation with similar charitable purposes.
Transaction-specific exemption
The organisation will be exempt from paying transfer duty on a specific property transaction if it meets all the following requirements:
It is a non-profit organisation.
It is of a charitable or benevolent nature, or the primary object is the promotion of the interests of Aboriginal people.
The specific property transaction is predominately for one or more of the following approved purposes:
Relief of poverty.
Relief and prevention of sickness and disability.
Relief of suffering and distress caused by old age.
Promotion of education.
Establishment of organisations to assist sections of the community with special needs.
Relief of distress caused by natural disasters or sudden catastrophes.
An organisation will generally not be eligible if the property will be used for any of the following purposes:
religious practices, including education and living spaces
holiday accommodation
lifestyle courses, or
leasing or resale for profit.
Transfer-specific concession
A charitable or benevolent organisation may be eligible for a transaction-specific concession (partial exemption) from transfer duty when it acquires property that will be used partly:
for an approved charitable or benevolent purpose, and
non-charitable purposes.
If approved, only the portion of the property used for non-charitable purposes is subject to duty.
The dutiable value is reduced by the proportion of the land that will be used for approved charitable purposes.
What is a charitable or benevolent organisation
A wide range of organisational structures may be eligible for the exemptions, including:
body corporates, societies and institutions
trusts administered by active trustees for charitable purposes, and
associations.
However, a trustee acting alone without broader institutional involvement is not considered an institution.
Religious organisations can only get exemptions for property used for approved charitable and benevolent purposes, not for predominantly religious purposes like churches or religious instruction.
Sporting bodies or sporting institutions generally, including those conducting activities on the sporting periphery such as equine research projects, are not accepted as charitable or benevolent bodies.
Required documents
You or your legal representative (solicitor or conveyancer) must gather all the following documents.
The organisation’s governing documents (constitution, memorandum and articles of association, or trust deed), showing:
rules detailing the objectives
a non-profit clause (income is not distributed to members), and
a wind up clause (assets go to another charitable organisation on dissolution).
Promotional or explanatory materials showing the organisation’s objectives and activities.
Additional documents for the general exemption
If applying to be approved as an exempt organisation for all transactions gather all the following:
Evidence your resources are used wholly or predominantly for education or poverty relief in Australia, for example financial statements or annual reports demonstrating resource use.
Details of current or proposed transactions.
Reapplying for the general exemption
If the organisation wants to renew a general exemption it only needs to lodge:
our initial letter of exemption, and
a letter from the organisation confirming the objects of the organisation have not changed since the exemption was approved.
Additional documents for the transaction-specific exemption
If applying for the transaction-specific exemption gather all the following:
The instrument effecting or evidencing the relevant transaction, for example the contract for sale or transfer of lease.
Detailed explanation of how the property will be used.
Promotional material for the specific project.
For partial exemptions, evidence of the extent of use for exempt purposes, such as floor plans showing which areas will be used for charitable activities.
When to apply
General exemption
Apply before entering property transactions.
Approval takes effect from the date of application.
If the exemption is granted, any transaction within 3 months before your application will be treated as exempt.
Approvals are typically granted for 3 years at a time.
If your organisation wants to continue the general exemption, it must apply again before the 3 years has expired.
Transaction-specific exemption
Apply early in the purchase process to avoid paying duty upfront.
If you paid the transfer duty, you may apply for a refund anytime up to 5 years after the initial duty assessment.
How to apply
Transfer duty exemptions and concessions are not automatic.
All applications for this exemption must be lodged online by a legal representative.
Your legal representative will:
advise you if you are entitled to the exemption or a partial exemption
prepare all necessary transfer documents
ensure your property settlement agreement is properly documented
complete and lodge the exemption application with Revenue NSW on your behalf
ensure all requirements are met and forms are correctly completed, and
Revenue NSW will review your application and supporting documents.
Your legal representative can advise on when you can expect a decision about your organisation’s application.
We may request additional evidence to verify the information you provide.
Duties Notice of Assessment
A Duties Notice of Assessment (Notice of Assessment) is a document from Revenue NSW that informs a purchaser or transferee of the amount of duty they must pay.
When your application has been assessed your legal representative will receive a Notice of Assessment showing:
a NIL balance if you were eligible for the full exemption, or
the amount you need to pay if you were eligible for a concession.
Read more about paying duties, including what happens if you do not pay by the due date.
Refunds
Your legal representative will need to apply for a refund on your behalf if your organisation has already paid transfer duty.
Objections and reviews
If we reject your application for an exemption, you can lodge an objection with us within 60 days of the decision.
If your objection is unsuccessful, or we do not respond within 90 days, you have the right to seek a review by the NSW Civil and Administrative Tribunal (NCAT).
The exemptions for charitable organisations are defined in sections 275 and 275A of the Duties Act 1997.
If you are a solicitor, conveyancer or accountant, all transactions under these sections must be lodged in eDuties under application type: Exemption - charitable and benevolent bodies - sections 275 and 275A.
Examples
Example 1: Full exemption for community school
A non-profit community school plans to purchase property and applies for the general exemption available for organisations established for the promotion of education.
To support their application, the school provides:
its constitution showing educational purposes
evidence of its current educational programs and activities, and
confirmation of its non-profit status.
After assessing the information, Revenue NSW approves their application.
The school is issued a letter confirming its exemption, allowing it to claim the transfer duty exemption on eligible property transactions for the next three years.
Example 2: Full exemption for disability support organisation
An organisation providing accommodation and support services for people with disabilities purchases a residential property to operate a group home.
The organisation applies for the transaction-specific exemption.
The organisation demonstrates the property will be used to house and support people with disabilities.
Even though some residents contribute to costs, the organisation shows that places are available regardless of ability to pay.
Their application is approved, and they pay no transfer duty on this transaction.
Example 3: Partial exemption for aged care provider
A charitable aged care provider purchases a large property.
They intend to use the ground floor for a nursing home (approved charitable purpose), while the upper floor will be leased to commercial tenants to generate income.
The nursing home represents 60% of the property's value.
The aged care provider applies for a partial exemption.
The organisation provides floor plans and valuations showing the proportion of space for each use.
Their application for a partial exemption is approved.
Duty is charged only on the 40% of the property that is used for commercial purposes.
Example 4: Partial exemption for religious organisation
A religious organisation purchases property intending to use part as a church and part as a primary school.
The school represents 70% of the value of the property.
The organisation applies for the partial exemption.
Only the school portion qualifies for the exemption, as property used for predominantly religious purposes (the church) is not eligible.
The organisation receives a partial exemption based on the proportion used for educational purposes.
Duty is charged only on the 30% used as a church.
Example 5: Retirement village not eligible
A charitable organisation operates a retirement village requiring substantial upfront contributions from residents.
The organisation applies for the transaction-specific exemption.
Their application is rejected because the substantial entry fees effectively exclude financially disadvantaged older people.
Revenue NSW determines this does not meet the charitable purpose of relieving suffering caused by old age, as access is limited to those who can afford significant payments.
The organisation must pay full transfer duty.
Example 6: Environmental charity not eligible
An environmental conservation organisation is purchasing land for a wildlife sanctuary.
The organisation applies for the general exemption.
The application is rejected because environmental purposes are not covered by the NSW transfer duty exemptions, which are limited to:
the relief of poverty and promotion of education (for general exemptions) or
the six approved purposes (for transaction-specific exemptions).
Environmental conservation does not fall within these categories.
Call the duties team on 1300 139 814 or +61 2 7808 6916 if you are overseas. Staff are available Monday to Friday, 8.30am to 5.00pm AEST (excluding public holidays).
