NSW tax law hits small property entities
The NSW Government has passed its stamp duties amendments bill increasing tax on small investment entities. All trusts and companies with fewer than 300 investors which have property holdings accounting for over 60 per cent of assets are affected. this includes unit trusts, syndicates and wholesale trusts. The Duties Amendment (Land Rich) Act is effective from November 14 allowing the state government will collect tax twice. Once when the entity buys property and again when shares change hands.
“Widely-held trusts”, such as listed property trusts, are exempt but the definition of widely-held has changed from 50 to 300 unitholders. The amendments bill was passed despite intense lobbying by the Property Council, the State Chamber of Commerce, the NSW Farmers' Association, the NSW Minerals Council and the Australian Retailers' Association.