SA Begins Consultation On Rewrite of Stamp Duties Act

Thursday 25 July 2019 @ 1.23 p.m. | Legal Research | Taxation

RevenueSA is seeking the public's view on the rewrite of the Stamp Duties Act 1923 (“the Act”) through what it calls "an open and transparent consultation process". Stage one of this rewrite process, which involves seeking public feedback, is now underway on the state's public consultation website "yourSAy". 

A discussion paper has been released by RevenueSA, who said:

"The purpose of this Paper is to initiate discussion and elicit feedback about RevenueSA’s plan to rewrite the Act so that we can identify ways of updating the Act and improve the overall effectiveness of the engagement process for all taxpayers in accordance with our service commitment to you."

As part of the request for feedback, the discussion paper makes it clear that the rewrite is not to be seen as an opportunity to "alter existing Government policy which underpins the current revenue base arising from stamp duty".  The rewrite is intended to be revenue neutral, with the aim being "only to reduce complexity and facilitate improved compliance with the Act". 

The current Act and subordinate legislation dates from 1923. Over its lengthy existence, the Act has accumulated around 150 amendments, and as a result, has become cumbersome to navigate and understand. Because of this longevity, the main matters which the rewrite is intended to focus on and achieve are:

  • reduced compliance costs for taxpayers;
  • facilitation of the efficient administration of the legislation;
  • introduction of an improved structure and a contemporary drafting style that is easy to understand and which provides certainty to taxpayers in relation to their duty obligations;
  • consolidation and simplification of the Act following the abolition of various stamp duties over recent years;
  • the removal of archaic language and Latin references by adopting a plain English drafting style;
  • converting “stamp duty” from an instrument-based tax to a transaction-based “duties” tax, similar to the changes made in other Australian jurisdictions; and
  • taking the opportunity to clarify existing complex provisions (without altering the existing underlying policy). 

The rewrite hopes to achieve cost savings to businesses and end-users due to an increased ease of compliance with the legislation.

As part of the discussion paper Revenue SA has produced a Table of Re-Write Items to be Considered  which documents various issues identified by industry practitioners and taxpayers as concerning provisions under the Act. Some examples of items listed in the Table are:

  • in the "interpretive provisions" to consider the removal of definitions from this section (and throughout the Act) and whether other definitions (especially where duplicated) can be moved to one central section. 
  • Subsections 2(14)-(15)  - Consider whether various foreign ownership surcharge definitions should be clarified
  • Section 23 (Assessments and stamping of instruments) - Consider amendment around “self-endorsement/assessment” process.
  • Section 30 (When agreement comprised of several letters) - May not be required due to references regarding stamping.
  • Section 31 (Certain contracts to be chargeable as conveyances on sale) - Largely concerning contracts, may not be required. Discussion may be required around the timing of imposition of duty.
  • Section 60A (Value of property conveyed or transferred)
    • Consider defining "market value".
    • Consider clarifying assumption of liabilities as consideration.
    • Consider clarifying Aged Care and Retirement Village assumption of liabilities e.g. accommodation bonds.
    • Consider whether greater certainty required around timing of transaction and the time for valuation.

RevenueSA and the Rationale Behind the Rewrite

As part of the Commissioner of State Taxation, RevenueSA's responsibilities include the overall management of:

  • the collection and enforcement of South Australia’s taxation revenue;
  • the collection of the fixed property component of the Emergency Services Levy (ESL);
  • various grant schemes; and
  • government rebate incentive schemes.

The revenue collected by RevenueSA (apart from the ESL Levy which specifically funds the provision of emergency services) is used by the State Government to fund the provision of essential services including public health and safety, education and law and order in South Australian.

The rewrite follows from the 2017/2018 Federal Budget, where the Commonwealth Government made commitments to work with State and Territory governments to reduce the government regulatory burden on small businesses and the broader economy. To this end, a Small Business Regulatory Reform Agreement (SBRRA) was established to concentrate on:

  • regulatory reform that reduces the costs of compliance;
  • delivering programs that align with current policy and administrative practices; and
  • identifying known deficiencies, administration concerns and improvements to the online user experience.

Following the Agreement, the SA Department of Treasury and Finance submitted four reforms to the Commonwealth it considered met the criteria, one of which was a rewrite of the Act and Regulations. According to RevenueSA, the motivation for the rewrite came from small businesses, lawyers, conveyancers and industry associations seeking reform. Their key concerns included identifying provisions that are outdated; and acknowledging that expert advice is required to interpret the Act, even for a simple property transaction, which leads to higher costs for end-users.

Status of the Review

External consultation on the rewrite began in May 2019 and is due to end on 26 July 2019. Following this, RevenueSA is to compile the feedback and produce legislation by early 2020. 

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