Stamp duty in the Northern Territory is one of the main kinds of levies or taxes (together with payroll tax and land tax) that is imposed by States and Territories (unlike income tax, which is imposed at the Commonwealth level). In the Northern Territory, stamp duty is administered by the Territory Revenue Office, which forms part of the Department of Treasury and Finance.
The rules for how stamp duty is imposed are contained in the Stamp Duty Act. The Territory Revenue Office has issued a number of guidelines to assist you with understanding your stamp duty obligations.
Stamp duty is imposed in the Northern Territory on dutiable instruments and certain kinds of dutiable transactions. A dutiable instrument includes, for example, a contract that gives effect to a transfer of dutiable property. It also includes:
- motor vehicle certificates of registration
- deeds that create trusts, and
- policies of insurance.
A dutiable transaction is any transaction in respect of which the Stamp Duty Act imposes stamp duty. It includes transactions undertaken without a dutiable instrument, provided they would have been subject to stamp duty if a dutiable instrument had been used (ie you cannot transfer dutiable property to another person and avoid stamp duty by not making the transfer in writing).
Stamp duty is generally imposed if a dutiable instrument or dutiable transaction relates to dutiable property, which includes land and certain business assets (eg goodwill). It also includes options to purchase dutiable property, and rights to use intellectual property. Shares and units are not specifically dutiable property so they usually are not subject to stamp duty. However, shares in land rich companies may be subject to landholder duty.
Generally speaking, stamp duty is calculated based on the dutiable value of the dutiable property that forms the basis of the transaction. This will generally be the greater of the amount paid for the dutiable property, and its market value free of encumbrances such as mortgages. There are also specific rules for calculating the dutiable value of certain mineral exploration licences. The amount of stamp duty paid is then based on a statutory formula, which differs between the kinds of dutiable instruments and transactions.
If the dutiable transaction is a transfer of dutiable property, the amount of duty payable is 5.45% of the dutiable value (if the value of the property is greater than $3,000,000). If it is more than $525,000 but less than $3,000,000, the rate is 4.95%. A complex formula applies when the dutiable value is $525,000 or less. In the case of a motor vehicle registration, the rate is 3%.
Stamp duty is payable by the person who acquires the dutiable property (ie the purchaser). It is paid by lodging the dutiable instrument and a lodgement form, together with a cheque for the amount of duty, with the Territory Revenue Office. It then stamps the dutiable instrument stating that duty has been paid and returns it to you. It must also stamp the counterparts of the instrument for you at a fee of $5 per counterpart.
The lodgement must be made within 60 days of the dutiable instrument being signed, although certain kinds of dutiable instruments such as motor vehicle registrations need not be lodged. The duty must generally also be paid in this 60 day period. If it is not, you might be required to pay a penalty or interest for late payment.
Certain kinds of transactions are exempt from stamp duty. For example, transferring a share in your home to your spouse is not subject to stamp duty, provided they did not pay anything for the share. Transfers made under property settlements following a divorce also are not subject to stamp duty. Otherwise, transfers of property between family members will generally be subject to stamp duty. Certain kinds of leases (eg leases relating to retirement villages) are also not subject to stamp duty.
Unlike some other States and Territories such as NSW, the Northern Territory no longer provides a first home owners’ concession. However, individuals are entitled to a rebate when they acquire the whole beneficial interest in a principal place of residence from another individual. It applies in relation to certain qualifying homes, such as a home that has not previously been occupied. They must also live in the home for at least 6 months after its purchase. The maximum value of the rebate is $7000.