Land Transfer Duty Legal Advice

Land transfer (“Stamp Duty”) applies when there is a transfer of dutiable property, such as when you buy a property.

However, a dutiable transaction can also be triggered by a number of different actions, like when the ownership benefits change, essentially when the people benefiting from owning a property change, even if it’s not a direct property sale.

Numerous exemptions and concessions apply either fully exempting or partially providing a concession to the stamp duty payable.

The duty exemptions and concessions range from exemptions for change in trustees, distributions of property to beneficiaries of trusts, the deceased estate exemption, charities exemption and concessions relating to fixtures dealt with separately from land.

Between the various jurisdictions, while there may be similar exemptions or concessions, the legislative requirements and administrative approaches taken by the respective Revenue Authorities vary significantly. It is therefore important to obtain legal advice in relation to whether you are eligible for any exemption and concession particular to the state or territory that the relevant dutiable transaction will be assessed.

Sub-sale duty is often referred to as a “double duty” measure whereby stamp duty is not only paid on the transfer of dutiable property but also when a specified event occurs which can trigger this second lot of duty payable.

In broad terms, sub-sale duty applies when an event such as a nomination of a purchaser takes place and that nominee either pays additional consideration for the transfer of the property or if “land development” takes place.

The application of the additional consideration and “land development” sub-sale provisions are highly legalistic and technical, so it is important to obtain advice if you are intending to transfer property other than to the initial purchaser on the contract of sale.

While it is commonly understood that transfers or assignments of leases do not attract stamp duty, it is important to understand that some grants, transfers or assignment of leases can attract stamp duty.

The provisions relating to lease duty are technical, however, in summary, it should be noted that lease duty can apply if any consideration other than rent reserved is paid or agreed to be paid in relation to a right to a right to purchase, right to transfer, right of first refusal or other circumstances prescribed in legislation.

Even though many people believe that transferring or assigning leases doesn’t involve paying stamp duty, it’s crucial to know that some lease-related actions can actually trigger this tax.

Lease duty laws can be intricate. In simple terms, you should know that lease duty could come into play if you’re involved in anything other than the usual rent when it comes to rights like purchasing, transferring, or having the first opportunity to buy, as specified by the law.

Given the complexity of these rules, it’s highly advisable to consult with a lawyer with expertise in this area. They can help you navigate the legal requirements and make sure you’re not caught off guard with unexpected tax obligations.

Partnership acquisition duty was until recently not a dutiable transaction in Victoria.

Partnership duty now applies in Victoria as partners in a partnership are taken to have beneficial ownership of partnership property in the same proportion as the partner’s partnership interest.

If a partnership (through a custodian) owns land in Victoria, then any changes in partnership interests can attract stamp duty and is dutiable.

Prior to undertaking any changes in partnership interests where a partnership is entitled to land, it is critical to obtain legal advice to know if such changes will trigger stamp duty.

Foreign Purchaser Additional Duty or “FPAD” applies to land acquired by foreign purchasers, be it land acquired by a foreign natural person, foreign corporation or a foreign trust.

While FPAD ordinarily applies if land is acquired by a foreign person, only residential land or non-residential land which will be converted to residential land is subject to FPAD.

An exemption to FPAD may apply if applicable land is purchased by a foreign person jointly with an Australian citizen or permanent resident. However, there is a requirement that the property in question is used and occupied as the principal place of residence for a minimum period of 12 months following acquisition.

In relation to the residence requirement post acquisition, it is useful to note that the Commissioner has discretion to vary the 12-month residence period either by reducing the duration of the requirement or extending the period in which the residence must commence.

At PCL Lawyers we provide individuals, businesses and organisations with clear legal advice and options. We also provide you with the best options considering your commercial position.

Our legal team have extensive experienced in handling disputes and litigation with revenue authorities and we provide robust defence when required. Otherwise, we take a considered approach to quickly resolve your dispute and protect your interests. Speak to one of our Victorian land tax lawyers today on 1300 907 335 or complete an online form.