The Real Property Amendment (Torrens Assurance Levy Repeal) Bill 2011 received royal assent on 25 May 2011. The effect of the new legislation is to abolish the controversial Torrens Assurance Levy introduced by the former NSW Labor Government.
This ad valorem levy applied from 1 July 2010 to all transfers of land in NSW having a value in excess of $500,000. The levy is charged based on the value of the land being transferred at the rate of 0.2% on transfers valued between $500,000 and $1 million, and 0.25% on transfers over $1 million. The purchaser is responsible for payment of this levy to the Land and Property Management Authority NSW (LPMA) in addition to the usual registration fee charged by the LPMA and stamp duty.
The new legislation will amend the Real Property Act 1900 and the Real Property Regulation 2008 to repeal the Torrens Assurance Levy with effect from 1 July 2011, while setting out the transitional provisions put in place for property transfers in the meantime. Under this transitional regime the Torrens Assurance Levy will continue to apply to registration of transfers that relate to the contracts for sale of land entered into on or after 1 July 2010 and before 1 July 2011, even if such transfers are lodged for registration at the LPMA on or after 1 July 2011. The levy will not apply to transfers executed to give effect to sale contracts exchanged after 1 July 2011.
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