Revenue NSW has announced the following:

“From 19 May 2022, section 8(1)(b)(ix) of the Duties Act 1997 introduced duty on certain transactions that result in a change in beneficial ownership.

A put option and/or call option granted over dutiable property in NSW (such as over land or an interest in land) is a ‘change in beneficial ownership’. This means that duty is payable on any grant fee paid for a put and/or call option entered into from this date.

Ad valorem transfer duty is calculated on the option fee paid for the grant of the option. The fee (consideration) includes GST (if applicable) but does not include security deposits, performance payments and legal costs. A minimum duty of $10.00 will be applied as per Section 273 of the Duties Act 1997.

Arrangements involving the grant of a Put Option and/or Call Option must be processed on Electronic Duties Returns (EDR). The Declaration for the Grant of a Put Option and/or Call Option (ODA 081) and the relevant evidentiary requirements must be kept with the EDR records and retained for a period of five (5) years (see Part 8 of the Taxation Administration Act 1996).

Notes:

• Surcharge purchaser duty (chapter 2A of the Duties Act 1997) does not apply to transactions that are liable to duty under section 8(1)(b)(ix).
• The Purchaser/ Transferee declaration Form is not required for the grant of an option.
• Duty paid in NSW on the option fee is not credited toward the duty payable when the option is exercised.
• If the call option is not exercised, a refund of duty will not be issued for any duty paid for the grant of the option.”