Changes to Land transfer (Stamp) duty in Victoria from 25 November 2020

The Victorian State Budget for the 2020-21 year has a focus on “people” and economic stimulus in order to assist the economy recover from the Covid-19 pandemic lockdowns.

The budget focused on promoting investment into housing and planning, rebuilding the state and its economy.

Some State tax focused measures that were announced include:

Land transfer (stamp) duty

• A 50% land transfer (stamp) duty discount for commercial and industrial properties in Victoria has been brought forward and will now apply to contracts entered into on or after 1 January 2021. Please note this excludes any Foreign Purchaser Additional Duty.

• Land transfer (stamp) duty discounts of 50% on purchases of new residential property and 25% on purchases of existing residential property in Victoria with a value of up to $1 million for contracts entered into on or after 25 November 2020 and before 1 July 2021.

• Confirming the eligibility of vacant land upon which a transferee intends to build a home can be entitled to the principal place of residence concession or first home buyer duty exemption or concession.

• Fast-tracking a 50 per cent stamp duty concession on the purchase of commercial and industrial properties in regional Victoria. The scheme was set to start in 2023, but the discount will be brought forward to contracts entered into on or after 1 January 2021. The concession will apply where the properties meet the qualifying use and timing requirements.

Land tax

• Victoria’s Big Housing Build will provide eligible build-to-rent developments a 50% land tax discount for eligible new developments until 2040. These developments will also be exempt from the Absentee Owner Surcharge over the same period.

• A land tax exemption will be applied to land owned and occupied by not-for-profit clubs that provide for the social, cultural, recreational, literary or educational interests of their members from the 2021 land tax year onwards.

Other technical amendments

The State Taxation Acts Amendment Bill 2020 (Vic) also introduced some other technical amendments the Duties Act 2000 (Vic), such as to:

• Ensure the partnership provisions can apply to look through multiple layered partnerships when assessing the duty of a partner’s partnership interest (where a partnership has partnership property);

• Exclude security interests in fixtures from being dutiable property;

• Extend the corporate reconstruction concession for matters involving multiple steps that contain arrangements involving both a consolidation and a reconstruction; and

• Confirm that the corporate consolidation concession is only available to consolidated groups under the Income Tax Assessment Act 1997 (Cth).

 For more information or advice about how the new tax measures will affect your transactions please contact:

Vittoria De Stefano
Principal Lawyer
M 0407 091 301
T 03 5226 8520
E vdestefano@ha.legal

Jamie McCallum
M  0408 270 480
T  03 5226 8563
E  jmccallum@ha.legal

Credit for the drating of this article goes to our graduate lawyer, Olivia O’Flaherty.