South Australian Consolidated Acts

STAMP DUTIES ACT 1923 - SECT 79

79—Mortgage securing future and contingent liabilities

        (1)         A mortgage that extends to future or contingent liabilities is, if limited to a particular amount, chargeable with duty as if it were a security for that amount.

        (2)         A mortgage that extends to future or contingent liabilities is, if not limited to a particular amount, chargeable with duty as follows:

            (a)         the mortgage is chargeable, in the first instance, with duty on the basis of an estimate of the highest amount to be secured (to be made on the assumption that all contingencies to which the mortgage or the liability is subject will actually happen); and

            (b)         if the amount of the liability secured by the mortgage subsequently exceeds the amount for which the mortgage has been previously stamped, the mortgage becomes chargeable with further duty as from the date when the liability was first exceeded and the amount of that further duty is to be calculated as follows:

                  (i)         a fresh estimate is to be made in accordance with this section of the highest amount to be secured; and

                  (ii)         duty is then to be calculated on the basis of that estimate and in all other respects as if the mortgage were a new and separate instrument made on the date when the liability was first exceeded; and

                  (iii)         the further duty is then to be calculated by subtracting the amount of duty already paid from the amount of duty calculated under subparagraph (ii).

Exceptions—

1         Paragraph (b) does not apply if the liability is wholly or partly denominated in a foreign currency and the amount for which the mortgage has been previously stamped is extended solely because of fluctuations in the rate of exchange.

2         If a mortgage becomes chargeable with further duty under paragraph (b), and the rate of duty payable on the mortgage has increased since it was previously stamped, then the further duty is to be calculated by subtracting from the amount of duty calculated under paragraph (b)(ii) the amount that would have been already paid if duty had then been calculated and paid at the higher rate.

3         If a mortgage becomes chargeable with further duty under paragraph (b), and the rate of duty payable on the mortgage has decreased since it was previously stamped, then the further duty is to be calculated by subtracting from the amount of duty calculated under paragraph (b)(ii) the amount that would have been already paid if duty had then been calculated and paid at the lower rate.

4         If—

            (a)         a further advance is made under—

                  (i)         a mortgage that is, until the further advance, wholly exempt from duty; or

                  (ii)         a mortgage that would, assuming it had been submitted for stamping immediately before the further advance, have been wholly exempt from duty; and

            (b)         in consequence of the further advance, the mortgage ceases to be of a type that is, or has become, wholly exempt from duty,

duty (or further duty) is calculated on the mortgage as if it secured only the further advance and, if duty was paid before the exemption took effect, as if no such payment had been made.

        (3)         If a mortgage is chargeable with duty under subsection (2), the parties must, on submitting the mortgage for stamping or further stamping, make a fair estimate of the highest amount to be secured (to be made on the assumption that all contingencies to which the mortgage or the liability is subject will actually happen).

        (4)         The Commissioner may accept the parties' estimate of the highest amount to be secured or, if dissatisfied with that estimate, substitute the Commissioner's own estimate of that amount, for the purposes of determining the amount of duty or further duty with which the mortgage is chargeable.

        (5)         The Commissioner has a discretion, in the case of a mortgage securing a contingent liability, to permit the mortgage to be stamped for an amount that is less than the full amount of that liability, but, if the contingency subsequently happens, further duty becomes chargeable on the mortgage as from the date of the happening of the contingency and the amount of that further duty is to be calculated as follows:

            (a)         duty is to be calculated on the mortgage on the basis of the full amount of the liability as if the mortgage were a new and separate instrument made on the date of the happening of the contingency; and

            (b)         the further duty is then to be calculated by subtracting the amount of duty already paid from the amount of duty calculated under paragraph (a).

        (8)         In this section references to an amount secured or to be secured by a mortgage are, if the mortgage secures both principal and interest or principal, interest, and rates taxes or other recurrent charges in respect of land, to be read as references to the principal only.