Stamp duty, also known as ‘transfer duty’, is a tax imposed by some Australian State and Territory Governments on business asset sales and acquisitions. This can add a material amount to the costs of transaction. It’s important for business owners, purchasers and acquirers to understand why Stamp Duty is important, when Stamp Duty is payable and Stamp Duty by state, across Australia.
The laws vary across Australia, by convention, the purchaser bears responsibility for the duty, making it crucial to seek advice from legal or accounting professionals regarding its implications for your business acquisition. This article offers a concise overview of how each state and territory levies stamp duty on business sales.
- New South Wales: In NSW, governed by the Duties Act 1997 (NSW), Revenue NSW oversees stamp duty. Since July 1, 2016, stamp duty isn’t required for business asset transfers (excluding real property). However, nominal duty may apply if the sale involves lease and goods transfer. Payment is typically due within three months of the transaction.
- Queensland: Stamp duty in Queensland is governed by the Duties Act 2001 (Qld) andapplies to many business asset sale scenarios. The application rate of transfer duty is based on the total sale price including GST at a rate of 1.5% and 5.75%. The Office of State Revenue Queensland manages this duty, payable within 30 days of the agreement for sale becoming unconditional.
- Victoria: Victoria’s Duties Act 2000 (Vic) exempts stamp duty on business asset transfers (excluding real property). The State Revenue Office Victoria oversees duties, with payment due within 30 days of agreement signing.
- Western Australia: Stamp duty in Western Australia applies to business asset sales, including goodwill and intellectual property, under the Duties Act 2008 (WA). Payment occurs post-asset exchange, within one month of receiving the assessment notice.
- Northern Territory: Under the Stamp Duty Act 1978 (NT), stamp duty applies to some business asset sales when the assets are conveyed in connection with land. Otherwise, stamp duty has been abolished on assets in NT for sale agreements signed from 9 May 2023.
- Australian Capital Territory: In the ACT, no stamp duty applies to business sales except for real property assets. Payment, typically within 90 days of agreement signing, is managed by the ACT Revenue Office.
- South Australia: SA’s Stamp Duties Act 1923 (SA) doesn’t impose stamp duty on business sale agreements from 18 June 2015, excluding land or motor vehicle transfers. Payment is typically due within two months, handled by Revenue SA.
- Tasmania: Tasmania’s Duties Act 2001 (Tas) exempts stamp duty on business asset sales except for those involving land transfers. Payment, typically within three months of the transaction, is overseen by the State Revenue Office of Tasmania.
Given the unique nature of each business sale and varying tax requirements across states and territories, consulting legal and accounting professionals is essential. Including appropriate stamp duty clauses in the sale agreement ensures compliance and clarity regarding duty payment obligations.
The specific application of these laws depends on the details of the proposed transaction. Accordingly, please reach out to NB Commercial Law for an obligation free consultation to assess your position and requirements.
Give NB Commercial Law a call, we offer a complimentary consultation and are happy to help.
Please email us via [email protected] or call +61 (07) 3876 5111 to book a consultation.
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About the Author
Daniel Dash has over ten (10) years of experience in commercial and corporate law and is a Director of Commercial Law team at No Borders Law Group. His areas of focus include contractual disputes, commercial transactions, finance, corporate advisory services and trusts.
His practice areas also include business structuring, shareholder contracts, corporate law, commercial litigation, commercial property, intellectual property, taxation and business succession planning.
Daniel works with company directors and business owners to achieve results that align with client objectives. In all matters, he endeavours to provide practical recommendations and develop clear and effective strategies.
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