Commercial leases

Abolition of duty on commercial leases

Commercial leases first executed after 30 June 2009, (other than long-term leases) are not liable to duty.

A lease includes an agreement for a lease.

To ensure consistent and equal treatment for all lessors, any lease first executed before 1 July 2009 will be liable to duty on the full cost or value for its full term and there will be no pro rata refunds for any period of the lease that continues beyond the abolition date.  Lessees should be aware that lessors may continue to incorporate the duty component as part of the cost of a lease.  Any failure to remove a duty component from a lease executed on or after 1 July 2009 is a matter between the lessee and the lessor. 

Any lease instrument entered into prior to 1 July 2009 remains liable to duty for the full term of the lease under the provisions in force at that time.   A lease executed after 1 July 2009 that purports to commence before that date may also be liable to lease duty. 

Section 421 of the Duties Act 1999 makes it clear that the repealed provisions continue to apply where:

• a lease instrument replaces a lease instrument evidencing or effecting a lease that was entered into before 1 July 2009, or
• an option or other arrangement, where the purpose, or main purpose, was to defer the execution of, or variation to, the lease instrument until 1 July 2009 (or later) so that Chapter 5 would not apply. 

A variation to a lease (other than long-term lease) commencing after 30 June 2009 will not be liable to duty.  Refunds will only be available to the lessor where duty has been overpaid.  On termination of a lease, a refund will only apply if neither the lessee nor any associated person will continue to lease the property under a new arrangement. 

Where duty has been based on the estimated cost of a lease, it is followed by periodic estimates and possible payment of further duty.  The transitional provisions provide for a final estimate to be made at the earliest estimate date after 30 June 2009.  Duty will be payable on the final estimate which will be taken to be the full cost of the lease and no further estimates will be required.

Commercial leases executed before 1 July 2009

Duty is payable on lease documents executed before 1 July 2009 over properties of a commercial nature (used for business).  Duty is payable by the lessor (owner of the property).  Long term leases (terms of greater than 30 years including any renewal options) are liable to duty at conveyance rates. 

Duty amount

Duty is calculated at the rate of 50c per $100 or part thereof of the total consideration for the lease agreement, or $20, whichever is greater.  A long term lease is subject to duty at conveyance rates. 

Compliance obligations/requirements

The lessor is required to lodge the lease document and pay the duty within 90 days of the execution (signing) of the lease.  You should be aware that giving false or misleading information is a serious offence.

Documents required on lodgment

A completed Leases or Licences Lodgment Form and the Lease executed by both parties is required.  Copies of the lease originally signed may also be lodged at the same time for stamping at no extra cost.

Relevant links

• Record keeping
• Leases or Licences Lodgment Form from 27 June 2006 (external site)

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Exchange of information

To assist in the identification and assessment of ACT taxes and grants we exchange information with other Revenue Offices and the Australian Taxation Office (ATO). 

The exchange of information with other Revenue Offices is in accordance with part 9 of the Taxation Administration Act 1999 (ACT) and similar legislation in the States and the Northern Territory.  The exchange of information with the ATO is in accordance with subsection 355-65 (5) Schedule 1 of the Taxation Administration Act 1953 (Cth).