Landholder duty in NSW

Landholder duty is NSW duty charged when you acquire a significant interest in a private company, unit trust or listed company holding NSW land worth $2 million or more. For a private company or private unit trust, transfer duty rates apply to your share of the value of its NSW land and certain goods, much as if you had bought that share directly. For a listed company or public unit trust, duty is on the full value (Duties Act 1997 (NSW), Chapter 4).

Because no land changes hands, landholder duty is easy to miss on a share sale, unit issue or family restructure. We advise on whether it applies and act in Revenue NSW reviews and objections, as part of our work on NSW state tax disputes. Section references are to the Duties Act unless we say otherwise.

What is a landholder?

A landholder is a unit trust scheme, private company or listed company whose NSW land holdings have an unencumbered value of $2 million or more (s 146(1)). Private unit trusts and private companies are private landholders; listed companies and public unit trusts (listed or widely held trusts) are public landholders (s 146(2)–(3)).

The $2 million test is easier to reach than it looks:

• Debt is ignored. Unencumbered value means value without regard to mortgages (s 23).
• Indirect holdings count. Land held through subsidiaries, sub-trusts and other linked entities, at links of 20% or more, is treated as held by the top entity in proportion to its entitlement (ss 158, 158A).
• Contracts and options count. Under an uncompleted contract for land, the buyer and the seller are each treated as entitled to all of it, and this extends to put and call options (s 160(1), (3A)). Revenue NSW reassesses if the entity's sale completes or its purchase falls through (s 160(2)–(3)).
• Fixtures count. Since 24 June 2020, land includes anything fixed to it, even if separately owned, unless Revenue NSW determines otherwise for a thing owned by someone other than the landowner or its associates and not used with the land (s 147A). Even before that change, a company's buried water pipeline, mostly under Crown land it didn't own, was held to be an interest in land (or alternatively goods), so buying all its shares attracted duty (Conexa Sydney Holdings Pty Ltd v Chief Commissioner of State Revenue [2025] NSWCA 20 at [2], [5], [68], [138], [166]).

What is the landholder duty threshold?

There are two thresholds: the entity must be a landholder, and you must acquire a significant interest in it, measured by what you would receive if all its property were distributed, ignoring its liabilities (s 150(1)–(2)).

Type of landholder	Significant interest
Private unit trust	20% or more
Private company	50% or more
Listed company or public unit trust	90% or more

The 20% test is easy to overlook: 25% of a private unit trust can attract duty where 25% of a private company would not. A wholesale unit trust registered with Revenue NSW is generally tested at 50% instead (ss 150(5), 157AA). Debt interests, such as a loan to the entity, don't count (s 150(1A)).

When does acquiring an interest in a landholder trigger duty?

Duty is triggered by a relevant acquisition (s 148), which you make if you acquire an interest that (s 149(1)):

1. is itself a significant interest,
2. amounts to a significant interest when added to interests held by you or an associated person, or
3. adds to a significant interest you (or you and your associates) already hold.

Separate buyers can also be aggregated where their acquisitions form substantially one arrangement, judged by factors such as whether the deals are conditional on each other, who the parties are and the timing (s 149(1A)–(1B)).

Who is an associated person?

The definition is broad (Dictionary cl 2 and "related person"). It covers:

• spouses and de facto partners, parents, children, brothers and sisters and their spouses or partners,
• a private company and its majority shareholder or directors, and companies with the same majority shareholder, and
• a trustee and a beneficiary of the trust, and trustees of two trusts with a beneficiary in common.

Where a bare trustee or nominee holds the units or shares, the ultimate beneficial owner is treated as the acquirer (s 157C).

How can you acquire an interest?

You acquire an interest whenever you obtain one or it increases, however that happens, even without acquiring units or shares (s 151(1), (3)). Examples are an issue of units or shares, a redemption or buy-back that lifts the remaining holders' percentages, a change to share or unit rights, and declaring a trust over your holding (s 151(2)). Entitlements are also tested as if you and your associates had used your powers to maximise them (s 163).

The three-year look-back

The acquisition statement must disclose acquisitions in the statement period: generally the 3 years before the relevant acquisition, or longer where it is related to an earlier acquisition (s 152(5)–(7)). Duty is charged on each interest disclosed, with a credit for duty already paid in that period (s 155(3)–(4)). For example, buying 15% of a private unit trust one year and 10% the next generally means duty on the full 25%, each parcel valued at its acquisition date.

How is landholder duty calculated?

For a private landholder, duty is charged at the general rate on the unencumbered value of all its NSW land holdings and goods, multiplied by the proportion represented by the interest acquired (s 155(1)). The general rate is the ordinary transfer duty scale, which rises in steps to $5.50 for every $100 above the top threshold, with the thresholds indexed each 1 July (ss 32, 33AC, 157).

Points that affect the figure:

• Goods are included, such as plant and equipment, but not stock-in-trade, materials, goods under manufacture, primary production goods, livestock, registered motor vehicles, or ships and other vessels (s 163K).
• Value-reducing arrangements are disregarded unless Revenue NSW is satisfied they had no collateral purpose of reducing the duty (s 162(2)–(4)).
• Land recently transferred by the entity to you or an associate within 12 months is still counted, with a credit for transfer duty paid on it (s 159A).

For a public landholder, duty is on the whole value of its NSW land holdings and goods (s 156(1)). If the acquirer, or an aggregated associate, is a foreign person and a private landholder holds NSW residential land, surcharge duty of 9% of the proportionate value of that land is added (ss 157E, 157H).

An illustrative example

For example, suppose a private company owns a warehouse worth $8 million, subject to a $5 million mortgage, and plant and equipment worth $1 million. You buy 60% of the shares for $2.4 million. Duty is calculated at transfer duty rates on $5.4 million (60% of $9 million), not on the $2.4 million you paid.

When must landholder duty be paid?

Within 3 months after the relevant acquisition, the acquirer must lodge an acquisition statement with Revenue NSW, including the unencumbered value of the land holdings and goods (s 152(1)–(3)), and pay the duty to avoid a tax default (ss 148, 153(1)).

Under an agreement to buy, or be issued, shares or units in an unlisted entity, you acquire the interest on the agreement liability date: the first of completion, delivery of the transfer documents, payment of the price, or 12 months after the agreement was first signed, unless Revenue NSW approves a longer period (s 161(1)–(3)). Both 3-month periods can therefore start before completion. If the entity was a landholder when the agreement was made but is not one by that date, the agreement date is used instead: the acquisition statement is then due within 3 months after it, but for an agreement over shares, duty can be paid up to 3 months after completion without a tax default (ss 161(2AA), 153(2)).

If duty is paid late, the Taxation Administration Act 1996 (NSW) (NSW TAA) adds daily interest at a market rate plus 8% a year (ss 21–22) and penalty tax, generally 25% of the unpaid duty and up to 75% for intentional disregard of the law (s 27). Penalty tax is generally reduced by 80% if you disclose in writing before Revenue NSW tells you it is investigating (s 28), and Revenue NSW can decide none is payable if reasonable care was taken (s 27(3)). Interest and penalty tax can also be remitted (ss 25, 33).

Who is liable?

The acquirer, the landholder (or the trustee of a unit trust) and any associates whose interests were aggregated are jointly and severally liable, and the landholder can recover from the acquirer (s 154(1)–(2)).

The landholder's liability is a charge on its NSW land, and Revenue NSW can lodge a caveat to protect it (s 154(3)–(4)). Unpaid duty can therefore surface later, when the land is sold or refinanced.

What landholder duty exemptions and concessions apply?

The main ones, most of which need an application or evidence, are:

• Corporate reconstructions and consolidations. On application, duty on an acquisition from another member of the same corporate group, or on interposing a new head company, is reduced to 10% of the normal amount (ss 273B–273D). The group needs a parent holding, directly or indirectly, at least 90% of the securities and voting control, and for a reconstruction a trustee of a discretionary trust can't be a member (s 273E). A reconstruction must be undertaken to change the group's structure or how it holds assets, not for a purpose of avoiding duty on another transaction, and not mainly to avoid other tax (s 273B(1)(b)–(c)). Apply before the transaction or within 5 years after the assessment (s 273F).
• Insolvency, estates and pro rata changes. Acquisitions by a receiver, trustee in bankruptcy, liquidator, executor or administrator in that capacity, from the distribution of a deceased estate, or solely from a pro rata change in all holders' interests (s 163A(1)).
• Relationship breakdown under Family Law Act 1975 (Cth) orders or binding financial agreements, and certain other agreements (s 163B).
• Primary producers. For an entity whose land is wholly or mainly used for primary production, duty applies only if its land, wherever located, makes up 80% or more of the value of all its property (s 163D).
• Discretion. Revenue NSW can grant a full or partial exemption where applying the Chapter would not be just and reasonable (s 163H).

How do you object to a landholder duty assessment?

You must fully and truly disclose the facts affecting the liability (NSW TAA s 10). Revenue NSW can generally reassess within 5 years of the initial assessment, and later where the facts weren't fully disclosed and duty was under-assessed as a result (s 9(3)). That period runs from an assessment, so it gives no protection if no acquisition statement was lodged and nothing has been assessed. Disputes often turn on valuation, who is associated, and whether separate acquisitions form one arrangement.

To challenge an assessment:

1. Object in writing within 60 days after the notice of assessment is served, stating the grounds fully and in detail (ss 87, 89). You carry the onus of proof (s 88). A late objection needs Revenue NSW's permission and can't be lodged more than 5 years after the notice of the initial assessment was served (s 90).
2. Duty can still be recovered while the objection is pending (s 94).
3. If dissatisfied with the objection decision, you can seek review in the NSW Civil and Administrative Tribunal or the Supreme Court, but not both, within 60 days after the date the notice of the decision issues, unless the court or Tribunal allows more time (ss 96, 97, 99(1)). If Revenue NSW hasn't decided the objection within 90 days (not counting any suspension while it waits for information), you can apply at any time after that, on at least 14 days' written notice to it (ss 92, 96(1)(b), 97(1)(b), 99(2), 100(1)).

See our guides to stamp duty disputes and objections and, if land tax is also in issue, land tax objections.

How we help with landholder duty

• Before you sign: we map holdings, associates and linked entities and estimate the duty.
• After the event: we prepare late acquisition statements, disclosures and concession applications.
• Disputes: we handle reviews, objections and Tribunal or Supreme Court proceedings, alongside your accountant (see working with accountants and tax agents).

Next step

Send us the sale, issue or restructure documents, the constitution or trust deed, a list of holders before and after (with any family or business links between them), and the latest valuation or balance sheet for the NSW land. Include any Revenue NSW letter or assessment and the date you received it. In a short first call we'll tell you whether landholder duty is likely to be in issue and what deadline you are working to.