Stamp duty is a duty which is payable in the ACT on the transfer of ‘dutiable property.’
Examples of dutiable property include but are not limited to: transfers of land, shares, and units in unit trusts. The stamp duty liability on larger transactions can be very costly, so it is important to take this into account when you are looking to buy.
When do I need to pay?
With the exception of off the plan purchases of residential apartments, stamp duty is payable within 90 days of the liability arising. When it comes to a transfer of land, liability arises on the date of exchange of contracts. This means that all relevant documentation must be lodged and assessed before this time.
I don’t have the money right now… so, I just won’t lodge!
Whilst simply not lodging the documents might sound good in theory, failure to lodge documents for stamping within 6 months is a strict liability offence in the ACT. The maximum penalty is 50 penalty units, which isn’t cheap. Currently, a penalty unit equates to $140 for an individual or $700 for a corporation, so the maximum penalty is up to $35,000.
In addition to a fine, failure to pay duty when it is due is also considered to be a tax default under the Taxation Administration Act. If a tax default happens, penalty tax is imposed in addition to the stamp duty owing and the statutory interest, accruing on the assessed amount.
But, I always lodge late. What’s changed?
Historically, the ACT Revenue Office has taken a relaxed approach towards late payment of duty. This is changing rapidly!
The ACT Revenue Office is actively enforcing the collection of stamp duty and is taking a much more aggressive approach to the late payment of stamp duty, including commencing legal proceedings to recover the debt if it is unpaid after the due date.
What should you do?
It is important that you be proactive, if you know that you will be unable to pay the stamp duty when it is due. You can do this by advising us as soon as possible so that we can try and make arrangements for you. Penalty taxes can be reduced if voluntary disclosure is made to the Commissioner regarding a tax default or late payment.
For more information contact the Property Commercial Finance Team: