Sky High Land Tax: How Nominating a Purchaser May Trigger Additional Duty
In Sky Jade Corporation Pty Ltd v Commissioner of State Revenue (Vic) [2026] VCAT 421, the Victorian Civil and Administrative Tribunal (Tribunal) confirmed that nominating a purchaser under a standard contract of sale of land will trigger additional duty if land development occurs prior to settlement. The Tribunal confirmed that a nominee, nominated pursuant to a sale of real estate nomination form (Nominee), will be considered to have obtained a right to have property transferred to the Nominee.
Background
Between 2017 and 2019, Sky Jade Corporation Pty Ltd (Sky Jade) signed contracts to purchase properties located in Box Hill and Coburg (Properties). The contracts included a provision that allowed the purchaser to nominate a substitute or additional purchaser.
Sky Jade executed sale of real estate nomination forms and nominated wholly owned subsidiaries of Sky Jade (Subsidiaries). No consideration was given for the nominations.
Between 2019 and 2020, applicants (on behalf of Sky Jade) made separate planning applications in relation to the Properties. This triggered an assessment for further duty, including penalties and interest, over and beyond the basic duty initially levied on the transfers.
Section 32I of the Duties Act 2000 (Vic) (Act) provides that when:
a vendor enters into a contract to sell property;
a purchaser nominates a Nominee;
a Nominee obtains the right to have the property transferred (emphasis added) on completion of the sale contract;
after the contract is entered into but before the property is transferred, land development occurs; and
the vendor transfers the property to the Nominee,
the transfer will be liable for double duty.
Sky Jade contended that the nomination process that occurred between Sky Jade and its Subsidiaries did not engage section 32I of the Act because none of the Subsidiaries obtained the right to have the Properties transferred to them on completion of the sale contract. Sky Jade contended that the Subsidiaries did not derive any right in relation to the Properties, including no right to:
sue under the contract;
obtain specific performance; or
obtain a purchaser’s lien over the Properties.
The Outcome
The Tribunal rejected Sky Jade’s arguments.
Whilst a Nominee has no rights against the vendor, a Nominee may sue in the purchaser’s name and join the purchaser as a co-defendant with the vendor. The Tribunal confirmed that the Subsidiaries plainly obtained the right to have the Properties transferred on completion of the sale contract, and thus, satisfied the requirement of section 32I of the Act.
The assessment for additional duty was confirmed.
What does this mean for purchasers?
Following the Tribunal’s decision, purchasers should consider potential duty implications when nominating another purchaser. A Nominee, nominated pursuant to a sale of real estate nomination form, obtains the right to have the property transferred to the Nominee. Thus, a nomination of a Nominee will satisfy section 32I of the Act, and additional duty is likely to be payable.
For more information in relation to duty, 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
Jemimah Fitzgerald
Lawyer
T: 03 5225 5219
E: jfitzgerald@ha.legal
Prepared with the assistance of Pippa Duniam
