Stamp duty amendments commence - Vic
June 17, 2019
HIA members will recall that two weeks ago a HIA Member Alert was sent about surprise stamp duty amendments following the Victorian Budget.
The surprise was the introduction of changes in the State Tax Acts Amendment Bill 2019 regarding the “economic entitlement” landholder provisions or landholder duty provisions in the Duties Act. That Bill was passed as an Act by the Victorian Parliament on 6 June 2019 despite objections from HIA and many industry groups.
The stamp duty changes will commence tomorrow, 19 June 2019, as the Act has received the royal assent today.
In simple terms the outcome of the legislation is that the practice of using development agreements or similar arrangements is further regulated and exposed to liability for stamp duty. However, since the legislation has been drafted widely it may catch other transactions associated with the sale and development of land.
If the unencumbered value of relevant land exceeds $1 million there is a risk that agreements or arrangements between two or more parties to develop the land will trigger stamp duty liability. These arrangements do not have to be developer agreements to potentially trigger stamp duty liabilities.
The exact impact of this legislation will depend on how your transactions are structured. If you have any involvement in the purchase, development or similar of land with clients you should get legal advice about the possible impact of this proposed legislation.
HIA will continue to work on behalf of members to obtain clarity from the State Revenue Office and the Victorian Government about how these amendments will be applied in practice.
Should you require further information please contact Keith Ryan, Director Workplace Services and Compliance on firstname.lastname@example.org or a member of HIA’s Workplace Services Team on 1300 650 620.