The NSW government will today table legislation that will rewrite the land rich provisions of the Duties Act allowing it to dramatically extend its tax base.
According to Property Council NSW, executive director, Ken Morrison, the NSW government totally ignored everything recommendation put forward to it in drafting its new legislation.
Morrison told propertyreview.com.au that the tax treatment of trusts would be under attack if the new legislation is passed by parliament.
“The NSW Government wants to dramatically extend the impact of stamp duty on trusts,” says Morrison.
The NSW Property Council believes the land rich provisions of the Duties Act amounts to nothing more than “a major extension of the government’s tax base.
The Property Council has been lobbying intensively on this issue in recent months all to no avail, sys Morrison.
“Draft legislation received in the last fortnight confirms that the Government has to date ignored our advice and that of our allies. We are now undertaking a last-minute round of lobbying to have the changes deferred.”
Key elements of the changes are:
• dropping the existing 80% land rich test to zero for trusts and 60% for companies
• dropping the existing greater than 50% majority interest test to 20% or more for trusts and 50% or more for companies and wholesale trusts
• reintroducing wholesale trusts into the stamp duty tax base
• tightening the definition of public unit trust and therefore the types of trusts exempted from conveyance duty
• strengthening of the tracing provisions to require tracing through interests of 20% or more.
“These changes will have sweeping impacts on the property industry and the wider business community,” he says.
Changes to the Duties Act to target anti-avoidance where foreshadowed in the May state budget, projected only to raise $24 million. Since then the Government has admitted privately it is seeking to widen the tax base significantly.
The Property Council has joined forces with the Farmers Federation, Retailers Association, State Chamber of Commerce and the Minerals Council to fight the changes. Further updates will follow.
