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The state exemption (s. 426) toolkit

This toolkit brings together everything you need to know about self assessing duty on transactions involving the state that are exempt under section 426 of the Duties Act 2001. This is an exemption that registered self assessors must lodge in OSR Online.

The state is not liable to pay duty unless the Duties Act expressly says otherwise.

Generally, all parties to a dutiable transaction are liable (s. 17(2) of the Duties Act), but under the usual commercial practice, the purchaser pays the transfer duty liability.

Where the state is the purchaser, this exemption will apply and the other party will not be pursued for payment of the liability. Alternatively, if the state is the vendor in a transaction, section 426 exempts the state from its joint liability; the purchaser, however, must still pay the duty according to the usual commercial practice.

Read the public ruling on liability to duty of parties to a transaction to which the state is a party (DA426.1) to find out more.

The state is usually represented by a government department or minister, and does not include government-owned corporations. The state may be represented by entities other than government departments. The Duties Act or another document establishing the entity will usually specify that it represents the state.

This exemption does not cover local authorities (councils) or the Commonwealth. Dutiable transactions involving the Commonwealth may be covered under Commonwealth legislation.

Assessing an exemption for the state

Here are some tips to help you assess this type of transaction in OSR Online.

How to lodge online

You must complete all mandatory data fields under each tab in OSR Online. Mandatory fields are marked with a red asterisk. There are some specific data requirements.

  • Answer Yes to the question: Is the consideration for this transaction less than the unencumbered value of the property included in this transaction?
  • Enter the unencumbered value of 100% interest in property if known; if unknown, enter $0.00 (nil).
  • Select Yes to the question: Is an exemption being claimed?
  • Select s.426 exemption state from the Exemption type drop-down list.

Non-Australian entity

When a transaction includes real property, each transferor and transferee must declare whether they are a non-Australian entity.

A non-Australian transferor or transferee must complete an identity details annexure.

For transferors, an email is automatically generated through OSR Online when the transaction is lodged, asking the transferor to complete an online identity details annexure. Contact us for help if you cannot obtain the transferor's email address.

Transferees must complete an identity details annexure and you must enter these details in OSR Online.

Records you need to keep

For this type of transaction, you must keep a completed dutiable transaction statement (Form D2.2).

For a transaction involving real property, you must keep the identity details annexure for each non-Australian transferee.

Find out more about your record keeping obligations.

Also consider...

Contact

Office of State Revenue
For transfer duty self assessment queries:

For queries on payroll tax, land tax and royalties:

  • call 1300 300 734 (Australia) or +61 7 3179 2500 (overseas)
  • send an email using our online enquiry form.