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Abolition of transfer duty on business assets delayed - again!

The Queensland State Government has yet again deferred the abolition of duty on core (non-real estate) business assets.

On 13 January 2012, Deputy Premier and Treasurer Andrew Fraser announced the further deferral as part of the Mid-Year Fiscal and Economic Review for 2011-2012.

Each state government was required to abolish certain state taxes including duties as part of the trade-off for the introduction of the GST. The state governments committed to abolishing most duties as part of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations.

The abolition of duty in Queensland on core business assets was first announced as part of the 2006-2007 budget measures and was originally scheduled to be abolished as to 50% on 1 July 2010 and the remaining 50% on 1 July 2011 – no abolition of the duty occurred on either date and the abolition was later delayed to 1 July 2012 and then further delayed to 1 July 2013. This time, the Government has not committed to a date and has simply stated in the recently published Mid Year Review that it will be “deferred until the Budget can accommodate the abolition”.

The significant deterioration of key performing revenue sources for the Government such as transfer duty and GST were blamed as the reasons for the further delay. According to the Treasurer the Government’s revenue forecasts for transfer duty are down by $1.148 billion and GST down by $544 million.

Duty on business assets other than land will no longer apply in NSW from 1 July 2012.

Posted in: Tax & ATO News Australia at 02 February 12