Stamp Duty and Vendor Payments: Lessons from Alphington Developments Pty Ltd v Commissioner of State Revenue
In Alphington Developments Pty Ltd v Commissioner of State Revenue [2025] VSC 709 the Court considered whether payments required to be made by the vendor under a contract of sale reduced the consideration paid for the purposes of assessing stamp duty.
The decision involved the purchase of land by Alphington Developments Pty Ltd (Alphington) at the former Alphington Paper Mill site in Melbourne. The contract of sale concerned two parcels of land, and two separate transfers of land (Contract). The first transfer was registered in 2016, and the second transfer was registered in 2017 (Transfers).
The purchase price of the land contained in the Contract was $94.95 million. However, the Contract required that the vendor contribute to demolition and remediation works on the land. The vendor ultimately contributed $18.34 million towards these works.
When registering the Transfers, the consideration recorded in the transfer documentation as $76.61 million, being the purchase price, less the amount contributed by the vendor. As a result, stamp duty was assessed on this reduced amount, rather than the full purchase price.
In 2020, the Commissioner of State Revenue (Commissioner) reassessed stamp duty on the basis that the consideration paid for the land, on which stamp duty is to be assessed, should be purchase price stipulated in the Contract.
Key issue
The key issue the Court was required to consider was whether payments made by the vendor under the Contract reduced the dutiable value of the land for the purposes of calculating stamp duty.
Specifically, the Court was required to examine the meaning of dutiable value (being the consideration for a dutiable transaction) contained in section 20(1)(a) of the Duties Act 2000 (Vic).
The decision
Alphington argued that the consideration paid for the land should be reflective of all payment obligations under the Contract, including the vendor’s contributions to remuneration works. On this basis, Alphington contended that the vendor’s contributions had the effect of reducing the purchase price and consideration paid for the land and therefore, the net amount should be that on which stamp duty is assessed.
On the contrary, the Commissioner’s position was that consideration flows to the vendor, rather than from the vendor and payments made by the vendor, albeit pursuant to the Contract, for remediation works were separate obligations, unrelated to the Transfers. Therefore, the Commissioner argued that the payments made by the vendor did not reduce the dutiable value of the land.
The Court agreed with the Commissioner finding the purchase price stipulated in the Contract was the true consideration paid for the land. In reaching its decision, the Court noted that:
the vendor payments were inconsistent with the ordinary meaning of consideration, which flows to the vendor;
the vendor payments related to the remediation works, and were not related to the Transfers themselves;
the timing and nature of the vendor payments were separate and not made contemporaneously with settlement of the Transfers; and
the Contract did not require Alphington to repay the vendor any amounts if settlement did not occur.
Therefore, the Court held that the purchase price contained in the Contract was the dutiable value of the land, on which stamp duty was required to be assessed.
Potential Issues
The decision confirms that in Victoria, consideration is the amount due to the vendor under a contract of sale, not the net financial outcome of a transaction.
This is particularly important for property developers where contract often include vendor contributions for remediation works, infrastructure and demolition works, which as highlighted, will not reduce the dutiable value of the land.
For more information, please contact:
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
This article was prepared with the assistance of Philippa Duniam, Law Clerk.
