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COMMONWEALTH
GOVERNMENT RESPONSE TO THE RECOMMENDATION OF THE HOUSE OF REPRESENTATIVES
STANDING COMMITTEE ON ECONOMICS, FINANCE AND PUBLIC ADMINISTRATION (THE HAWKER
COMMITTEEE) INQUIRY INTO REGIONAL BANKING SERVICES
New
South Wales
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Effective
1 July 1996, the NSW Government abolished Loan Security Duty
on the re-financing of a secured loan (such as a mortgage) up to the amount
originally secured. As a result, home owners seeking to change their mortgage
from one financial institution to another, either for reasons of convenience
or cost, pay no loan security duty in NSW provided the amount borrowed is not
increased.
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Victoria
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Since
1 May 1997, the Victoria Stamps Act 1958 has provided an
exemption for stamp duty on mortgages where loans are being refinanced. The
existing exemption from mortgage stamp duty will apply in the circumstances
of a bank branch closure. There are no conditions which apply to the
exemption other than the borrower must be the same party in both transactions
and the exemption applies only to the amount originally borrowed. If
additional funds are borrowed in the refinancing (or changeover)
arrangements, stamp duty would be payable on the additional amount.
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Queensland
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There
are currently several concessions or exemptions which enable bank customers
to transfer their loans from one bank to another for minimal or no stamp
duty. For example, where the new financier accepts the original mortgage as
security, it is possible to transfer the mortgage for nominal stamp duty of
$5.00.
An
exemption from stamp duty is available for the refinancing of loans secured
by a mortgage over a borrower’s principal home provided that certain
qualifying conditions are met. However, this exemption is limited to the
balance owing under the previous mortgage or $100,000, whichever is the
lesser.
Relief
from stamp duty is also available on refinancing rural loans where certain
qualifying conditions are met.
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Western
Australia
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The
Government’s position has been not to provide general exemptions. The reasons
for this position include the administrative and revenue impacts
(particularly if the exemptions were not restricted to country bank branch
closures) and the element of choice for the customer (given the availability
of electronic alternatives to branch banking).
There
is a refund scheme which enables some loans relating to farms to be exempt
from stamp duty.
In
late 1999 the Government introduced an administrative scheme for rebating
mortgage duty (as well as Financial Institutions Duty and Debits Tax) if
residents transfer their banking to a new “community bank” (like those in Victoria).
The establishment of a “community bank” would be seen as strong evidence that
other banking alternatives in the town were inadequate.
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South
Australia
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On 17 September 1997,
the Premier announced that the Government would provide a mortgage stamp duty
exemption for those persons in rural South
Australia who are forced by local
financial institution branch closures to move their accounts and loans to
another financial institution still operating in the town. This initiative
was expanded beyond that initially announced to include transfers to a
financial institution in the nearest town, where the closing financial
institution was the last in existence in the town affected.
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Tasmania
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In
the 1997-98 Budget, the Tasmanian Government provided for the abolition of
stamp duty on the refinancing of residential, commercial and rural loans.
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Australian Capital
Territory
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The
ACT Government does not currently impose stamp duty on mortgages or the
discharge of mortgages where customers are transferring loans to another
bank.
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Northern
Territory
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The
Northern Territory does not levy stamp duty on mortgages.
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