The NSW Government introduced a new bill into Parliament on 11 May 2023 that proposes to change to the duty implications of acquiring a “public landholder”, such as a listed company or public unit trust scheme.

The acquisition of an interest of 90%, or more, in a public landholder is currently subject to landholder duty at concessional duty of 10% of the duty amount that would be charged, at the general rate of duty, on a direct acquisition of the landholder's dutiable property (such as land and equipment). The general rate reaches 5.5%, which currently means the concessional rate for takeovers of listed companies and public unit trusts generally equates to around 0.55%.

The Revenue Legislation Amendment Bill 2023 seeks to amend the Duties Act 1997 (NSW) by removing the concession for takeovers of listed companies and public unit trusts. This means that public M&A deals may soon be taxed at the same rate as private company M&A deals – i.e., at the general rate.

The change is proposed to take effect from 1 July 2023 and there are currently no transitional provisions under the Bill. The apparent lack of transitional provisions means that the changes could impact transactions already entered into but which are not due to complete until 1 July 2023 (given NSW landholder duty is typically imposed on completion).

Unfortunately, the change proposed by the Bill will increase transaction costs for public M&A deals, which may have an impact on the level of M&A activity for listed entities with landholdings in NSW.