NSW Small Business Stamp Duty Exemption: What Is It and Does Your Business Qualify?

For many small business owners in New South Wales, insurance is a non-negotiable overhead.¹

For example, if you run a home goods store, you might rely on your product insurance to cover you if a customer gets an electric shock from a faulty toaster. Or, if you work as a tax adviser, your professional indemnity insurance is there as an important safeguard in case your advice causes a client to lose money.¹

But did you know you could be paying more for small business insurance than you need to? If you’ve never heard of the NSW small business stamp duty exemption, you might be leaving money on the table every year.

But what is this exemption? Do you qualify? And if so, how can you claim it? Whether you’re just starting your own small business or you’ve been up and running for years, here’s what you need to know about the NSW stamp duty exemption.

What is the NSW small business stamp duty exemption?

Introduced on 1 January 2018, the NSW small business stamp duty exemption allows eligible businesses with an aggregated turnover of less than $2million to claim an exemption from paying stamp duty on certain types of insurance policies.²

The exemption is offered to Capital Gains Tax (CGT) small businesses in NSW and applies to specific types of cover, including commercial vehicle, occupational indemnity and product or public liability insurance.³

Why is there stamp duty on insurance in the first place?

“Stamp duty” is a term used for any tax levied by state or territory governments on certain documents or transactions. Depending on where you live in Australia, you might pay stamp duty on your car registration or vehicle ownership transfers, or when you buy a property.⁴

In NSW, life and general insurance providers are liable to pay a stamp duty – called an “insurance duty” – on every eligible policy.⁵ In practice, this is typically passed on to policyholders through their insurance premiums,³ and is calculated at either 9% or 5% of the premium cost, depending on the policy type.⁶

When you pay stamp duty on insurance in NSW, it goes to fund essential community services across the state, including education, public transport, health care and infrastructure.⁷

Which insurance types qualify for the NSW stamp duty exemption?

Eligible small businesses are exempt from paying stamp duty on the following types of business insurance:³

• Occupational indemnity insurance (also known as professional indemnity insurance)
• Product and public liability insurance
• Commercial vehicle insurance
• Commercial aviation insurance.³

But what if you’ve purchased a policy that bundles exempt cover, such as product and public liability insurance, with non-exempt cover, such as business interruption insurance?

In that case, your insurer will be able to calculate the portion of your premium that is exempt, ensuring they only charge you stamp duty on the remaining, non-exempt portion.³

Do you qualify for the NSW small business stamp duty exemption?

To qualify for the NSW stamp duty exemption, your business must be a capital gains tax (CGT) small business.3 And to qualify as a CGT small business, you must:³

• Be carrying on a business with the intention of making a profit
• Have had an aggregated turnover of less than $2million in the previous income year
• Be likely to have an aggregated turnover of less than $2million in the current income year.³

Bear in mind, this eligibility criteria doesn’t just apply to your small business entity .8 It also takes into account any affiliates and any other connected entities,³ such as if your business controls another business – or is controlled by another business.⁹

What does ‘aggregated turnover’ mean?

Your business’s aggregated turnover is simply your annual turnover Australia-wide, plus the annual turnover of any affiliates or connected entities.³ Partnerships, trusts and super funds don’t count as affiliates.³

If you aren’t sure if you qualify or just want more information, you may wish to get in touch with your tax adviser.

How might the small business stamp duty exemption apply in your industry?

Here are some everyday scenarios to illustrate when stamp duty exemptions might apply in NSW for CGT small businesses:

• A bricklayer with both a public liability insurance policy and a business car insurance policy for her work vehicle could be eligible for the NSW small business stamp duty exemption for both policies.
• A cafe proprietor who has a few different hospitality insurance products for his cafe, including product liability insurance, business building and contents insurance and business interruption insurance, may be able to claim a NSW stamp duty exemption for his product liability insurance, but not for his other business insurance policies.
• An interior designer with sole trader insurance that includes professional indemnity insurance may be able to apply for an exemption for the professional indemnity insurance portion of her policy.

How do you claim the NSW small business stamp duty exemption?

You can claim the NSW stamp duty exemption whenever you take out or renew an eligible business insurance policy.2 Here’s how to do it.

Step 1: Make a declaration

Start the process by declaring your CGT small business status to your insurer. Only the insured person can make a declaration – an agent or broker can’t do it on your behalf.³

Approved forms of declaration can include:³

• A written declaration, such as by letter or email
• A verbal declaration, such as one made during a recorded telephone call with the insurer
• An electronic declaration, such as one made by selecting a check box on a form on your insurer’s website.³

However, the exact declaration process can differ between insurers, so you may want to get in touch with yours to find out more. If you have policies with different insurers, you’ll need to make a declaration to each.²

Step 2: Wait for your insurer to check your eligibility

After you make your declaration, your insurer will decide whether you’re eligible for the stamp duty exemption.³ If you are, they’ll apply the exemption to your policy.²

Step 3: Reapply every year

Because your declaration is only valid for one income year, you’ll need to make a new declaration every year when your policy renews.²

Confirming your eligibility

Generally, it’s up to your insurer to determine whether you’re eligible for an exemption based on the declaration you provide. However, it’s worth keeping in mind that providing false or misleading information on your declaration attracts a maximum penalty of $11,000, and you may also be required to pay back any unpaid duty, as well as interest and tax.³

Checking with your tax adviser about your eligibility before you begin the process may be a good place to start.³

Do you need to submit a declaration every year?

Yes, as noted above, to receive the NSW Small Business Stamp Duty Exemption, you’ll need to make a new declaration to your insurance provider every year.³

What if you’ve already paid stamp duty?

If you own a CGT small business in NSW and you have already paid stamp duty on your business insurance, you may be eligible for a refund. You’ll need to apply for a refund through your insurer, so it’s a good idea to get in touch with them to find out more about the process.³

Where else might you be able to reduce your business costs?

We understand running a small business is more than a full-time job. But taking a little time to explore opportunities to save on costs could make a difference to your bottom line.

Here are some ideas you may wish to consider to get you started.

Check for small business grants

There are lots of funding programs and small business grants in NSW and beyond. Some places to find these opportunities might include:

• The Australian Government’s grants and programs finder
• The NSW Government’s grants and funding search tool.

For some help exploring your options, you can book a call with the Service NSW Business Bureau for one-on-one support.¹¹

Check for other financial support and incentives

There are also a number of incentives and other support schemes to help small businesses in NSW. For example, you might be able to claim:¹²

• Wage subsidies of up to $10,000 for hiring eligible individuals
• A payroll tax rebate for businesses that hire new trainees and apprentices
• Fee-free traineeships to save you up to $1,000 per new trainee.¹²

Explore CGT concessions for small business

Aside from stamp duty exemptions, businesses with an aggregated turnover of under $2million may also be eligible for other small business CGT concessions.¹³

These could include:¹⁴

• Small business 15-year exemption – If you sell an asset you’ve held for at least 15 years continuously, such as a piece of property, you’ll have no assessable capital gain. This exemption only applies if you’re aged 55 or over, retiring or permanently incapacitated.
• Small business 50% active asset reduction – If you sell an active business asset that you’ve owned for 12 or more months, you can claim a 50% reduction in capital gain.
• Small business retirement exemption – This exemption applies to paying capital gains tax on the sale of business assets up to $500,000 (lifetime limit). People aged under 55 are required to put the amount that’s exempt into a retirement savings account or a complying superannuation fund.
• Small business rollover – You can defer all or part of the capital gain from the sale of an active asset for two or more years. This exemption only applies where you acquire a replacement asset or incur additional expenses on making capital improvements to an existing asset.¹⁴

Regularly check your business insurance

It can also be good practice to regularly review your business insurance,¹⁵ especially when your policies are coming up to renewal time.

Shopping around and comparing features and pricing might help you save on your premium or find a policy that better serves the evolving needs of your business.¹⁶

For example, you might want to check your policy any time you have a change in your business, such as when you:¹⁵

• Sell or buy equipment or vehicles
• Move to a new premises
• Change your number of employees
• Start offering new products or services.¹⁵

Looking for business cover that’s a bit more you-shaped? Learn more about Youi’s small business insurance options and consider starting a quote online to see if we might be the right fit for your business.

¹Source: Australian Government – Types of business insurance, n.d.
²Source: Revenue NSW – Commissioner’s practice note: General Insurance – Small Business Exemption – Small Business Declaration, December 2017
³Source: Revenue NSW – Small business exemption, n.d.
⁴Source: Australian Government – Stamp duty, n.d.
⁵Source: Revenue NSW – Insurance duty, n.d.
⁶Source: Revenue NSW – Types of insurance, n.d.
⁷Source: NSW Government – NSW Treasury revenue and taxation, n.d.
⁸Source: Australian Taxation Office – Small business entities, May 2022
⁹Source: Australian Taxation Office – When an entity is connected with you, August 2021
¹⁰Source: Revenue NSW – Insurance duty: apportionment of premiums between Australian jurisdictions, April 2019
¹¹Source: Service NSW – Business grants, voucher programs and financial assistance, July 2026
¹²Source: NSW Small Business Commissioner – Government grants and support for small business, August 2025
¹³Source: Australian Taxation Office – CGT concessions eligibility overview, January 2026
¹⁴Source: Australian Government – Capital gains tax for business, n.d.
¹⁵Source: Australian Government – Manage your business insurance, n.d.
¹⁶Source: WA Government Small Business Development Corporation – Practical guide to business insurance, n.d