What is stamp duty? Stamp duty is a charge on certain documents and transactions.

How is stamp duty charged? Stamp duty is charged at either a flat rate or an ad valorem rate (based on the value of the transaction) depending on the particular document or transaction. For further information on these rates please see the Stamp Duty: Current Rates sheet. What will be the impact of the Goods and Services Tax (GST) on stamp duty? When the GST is introduced on 1 July 2000, the following changes will be made:

§ stamp duty on listed marketable securities will be abolished from 1 July 2001;

§ liability for stamp duty on the sale of used cars will be

transferred from the dealer to the purchaser and will be calculated on the GST inclusive price; and

§ betting tax will be abolished from 3 July 2000.

For other transactions, stamp duty will be charged on a value including or excluding the GST, depending on the nature of the transaction. For rental business, stamp duty will be levied on the value of rental received, less the GST. If you sell cattle, stamp duty will be levied on the value of the sale price of cattle, less the GST. Stamp duty on all other transactions will be charged on a value including the GST. Which documents or transactions are subject to stamp duty and who is liable? A range of documents and transactions are subject to stamp duty. They include: Transfer or conveyance of real property (land and buildings) When you buy Victorian land, which may include buildings, you are liable to pay stamp duty. The duty payable is based on the market value of the property or the consideration, whichever is greater. Transfer of shares If you buy marketable securities through a broker (on market) you and the seller are both liable to pay an equal amount of stamp duty (ie you

are liable to pay half the duty and the seller is liable to pay the other half). If you buy marketable securities which are listed on the Australian Stock Exchange (off market) you are liable to pay stamp duty. If you buy marketable securities which are not listed on the Australian Stock Exchange you are also liable to pay stamp duty. The duty payable is based on the market value or the consideration, whichever is greater. Lease or agreement for lease of real property If you lease commercial property from a third party, you are liable to pay stamp duty. The duty payable is based on the rental payable for the term of the lease. Assignment or transfer of lease of real property When you have a lease transferred to you, you are liable to pay stamp duty. The duty payable is based on the annual rental at the date of assignment and the remaining term of the lease. Mortgages, bonds, debentures or covenants When you borrow money which is evidenced by a document, you are liable to pay stamp duty, which is based on the amount you have borrowed. Deeds of settlement If you settle either real or personal property with a third party, you are liable to pay stamp duty. Applications for registration or transfer of a motor vehicle or commercial trailer When you apply to register a new or used motor vehicle or commercial trailer or transfer a currently registered motor vehicle or commercial trailer, you are liable to pay stamp duty. The duty payable is based on the market value or purchase price, whichever is greater.

Assurance or insurance business When you take out an insurance policy, such as car insurance, the insurance company is liable to pay stamp duty, although the cost may be passed on to you. The amount of duty is based on the premium paid to your insurer. Life insurance policies When you take out life insurance, the insurance company is liable to pay stamp duty, although the cost may be passed on to you. The amount of duty is based on the premium paid for term and temporary life insurance policies, and on the sum insured where the life policy is not for a fixed term. Rental business If you receive income from the renting or hiring of goods, which exceeds $6,000 in any month, you areliable to pay rental duty. Income from some hire purchase agreements is also subject to duty. Sale of cattle, sheep and goats If you sell cattle, sheep or goats or carcases of cattle, sheep or goats, stamp duty is payable. If you sell through an approved agent, the agent is liable to pay the duty but may pass the cost on to you. If you are the vendor, you are required to pay stamp duty by way of adhesive duty stamps. Are there any exemptions? Some exemptions do apply in certain situations, including:

§ transfers to charitable bodies;

§ transfers to a beneficiary entitled under a deceased estate;

§ transfers between spouses or de facto couples;

§ residential leases;

§ first home buyers (subject to certain conditions); and

§ concession card holders (subject to certain conditions).

Further information If you would like further information or assistance please contact the state Revenue Office: By correspondence GPO Box 1641N MELBOURNE VIC 3001 or DX 260090 Melbourne In person State Revenue Office, Level 2, 121 Exhibition Street, Melbourne Victoria Telephone 13 2161 Facsimile 03 9628 0899 E-mail sro@sro.vic.gov.au Internet www.sro.vic.gov.au

Last Updated: 30/06/2000