Parramatta | Tax Management

Vendor Duty

From 1 June 2004, vendors of land-related property (including investment properties) in NSW are required to pay a vendor duty of 2.25% of the dutiable value of the property.

Exemptions

• Principal place of residence.
• First sale of new buildings.
• Land where the dutiable value has not increased by 12% or more since acquisition.
• Deceased estates.
• Vacant land that has been substantially improved.
• Farm land.
• Sale of land as part of business where land is < 60%.

What is dutiable value?

Dutiable value is the higher of either the consideration (sale price) or the unencumbered value of the land. If, under the agreement, the purchaser agrees to pay the vendor duty, that amount is not taken into account when determining the consideration for the property.

When is payment due?

Where an agreement for sale with consideration is entered into, including off-the-plan purchases, vendor duty must be paid by the settlement date. For a transfer or a declaration of trust, vendor duty must be paid within three months from the date the liability first arises (normally the date of first execution of the instrument).

Important point to note

You can still be liable to vendor duty even if you make a loss on the sale of land Contact us to find out how vendor duty affects your circumstances [contact us].