The second draft of the Duties Bill 2001 has been released by the Office of State Revenue for further consultation.
The Property Council's comments on the earlier version of the draft Bill had focussed on the proposed changes to the stamp duty on lease provisions.
Concerns were held about the inclusion of oral leases as dutiable, the requirement for annual upstamping of leases, and the need to clarify when liability for lease duty arises in the case of fitting-out premises and when an option is exercised.
Although calls for the abolition of the administratively burdensome lease duty were not successful, it appears that many of the other Property Council recommendations on the content of the lease duty provisions have been adopted:
- lease duty will only be imposed on written instruments that effect or evidence leases and occupancy rights;
- upstamping for unascertainable amounts of rent will be required only at the end of the lease, after the final rent review, or the earlier termination of the lease;
- clarifies that liability arises when the lessee takes possession in accordance with the instrument, rather than just when the lessee takes possession (which could have included entering the premises for fitout prior to commencement of the lease); and
- upstamping is not required where the unascertainable amount of rent is less than $10,000 (ie when the duty payable on the unascertainable amount is less than $35).
However, the draft Bill does not introduce new refund provisions for early termination of leases.
In NSW and Victoria refunds are available within 5 and 3 years respectively of the termination of a lease "in any circumstances whatsoever".
The Office of State Revenue's response to the Property Council's earlier submission noted that although lease duty will not be abolished as part of the Duties Bill, which is intended to be a rewrite of the Stamps Act, the redrafting of the stamp duty on leases provisions are intended to reduce administrative costs.
Consultation on the draft Bill closes in mid-July, and it is anticipated that it will be introduced into Parliament in September.
Please direct any queries on the second draft of the Duties Bill to Charlotte Byrne on 07 3229 0666.