Sim – Victorian Foreign Purchaser Additional Duty Triggered by the Spouse of an Australian Citizen
Ms Sim, a foreign purchaser residing in Victoria, has been unsuccessful challenging the application of foreign purchaser additional duty in the case of Sim v Commissioner of State Revenue [2025] VCAT 349. The Victorian Civil and Administrative Tribunal (VCAT) held that Ms Sim did not meet the requirements for exemption under section 69AJ of the Duties Act 2000 (Vic) (Act).
Background
In 2019, Ms Sim acquired a residential property in Alphington, Victoria, in her sole name from a property developer. At the time, she was a citizen of South Korea, residing in Australia on a temporary partner visa (subclass 820) sponsored by her Australian spouse, Mr Sam.
Although the title was registered solely in Ms Sim’s name, Mr Sam contributed the majority of the purchase price the remainder was financed by a mortgage, taken out in both names.
Stamp duty at its usual rate was initially assessed and paid upon purchase. However, the Commissioner of State Revenue later reassessed the duty and applied a 7% foreign purchaser additional duty (FPAD) on the grounds that Ms Sim, as a foreign individual, was liable under the Duties Act 2000 (Vic).
Section 69AJ Exemption
Under section 69AJ of the Act, a foreign purchaser can be exempt from the additional duty if all the following conditions are satisfied:
The foreign purchaser is the spouse or domestic partner of an Australian citizen or permanent resident;
The property is transferred to both parties jointly;
The foreign purchaser occupies the property as their principal place of residence for at least 12 months, beginning within 12 months of possession.
VCAT’s Decision
Ms Sim conceded that she was a foreign purchaser, but sought the exemption under section 69AJ of the Act, arguing that the property had been ‘in substance’ jointly acquired due to her husband’s significant financial contributions. She submitted that a resulting trust existed in favour of Mr Sam, therefore giving him an equitable interest in the property.
However, VCAT rejected this argument, stating that the exemption under section 69JA of the Act requires joint legal interest – that is, both spouses must be the registered proprietors on title at the time of acquisition. As Ms Sim was the sole registered proprietor, and the property was not at law jointly transferred to them, she failed to meet this core requirement. As a result, the foreign purchase additional duty remained payable.
VCAT emphasised that equitable interests, such as resulting trusts, are not sufficient to satisfy the legislative requirements for a joint transfer under section 69AJ.
Key Takeaways
The exemption under section 69AJ is strictly construed. All statutory requirements must be met, particularly the requirement that the transfer must be to both spouses, jointly.
A financial contribution or equitable interest in the property is not sufficient to satisfy the requirements for the exemption to apply.
Foreign individuals purchasing property in Victoria, even those with an Australian spouse, should ensure that appropriate advice is sought prior to entering into any contract of sale if they wish to rely on the exemption.
Alasdair Woodford
Principal
T: 03 5225 5217 | M: 0436 456 144
E: awoodford@ha.legal
Joseph Flanagan
Senior Associate
T: 03 5226 8504 | M: 0491 307 550
E: jflanagan@ha.legal
Tayla Berger
Senior Associate
T: 03 5226 8559 | M: 0407 825 365
E: tberger@ha.legal