Property nominations and duty: VCAT confirms the position
The Victorian Civil and Administrative Tribunal’s (Tribunal) recent decision in Ramaihi v Commissioner of State Revenue [2026] VCAT 655 (Ramaihi) provides further guidance on the application of Victoria’s sub-sale duty provisions where a purchaser under a contract of sale nominates another entity to take a transfer of the property.
Following the approach taken in Wilkinson v Commissioner of State Revenue [2024] VCAT 807 (Wilkinson) and Sky Jade Corporation Pty Ltd v Commissioner of State Revenue [2026] VCAT 421 (Sky Jade), the Tribunal confirmed that a nomination under a standard contract of sale can confer a ‘transfer right’ on the nominee for the purposes of the Duties Act 2000 (Vic) (Act).
Ramaihi considered, among other things, section 32I of the Act, whether a transfer right can be obtained before the transferee was established, and whether obtaining a planning permit was a condition precedent to performance or formation.
Background
Mr Ramaihi entered into several contracts to purchase properties which he intended to develop through corporate trustees of unit trusts (Transferees). The Transferees were subsequently nominated to take transfers of the properties but had not been incorporated when the relevant contracts of sale were entered into.
Between the contracts being signed and the Transferees being nominated, planning permit applications were lodged in respect of the properties. In one transaction, the contract of sale was itself conditional on a planning permit being obtained, with the Transferee nominated after that condition had been satisfied.
Following an investigation, the Commissioner of State Revenue (Commissioner) determined that the sub-sale provisions in Part 4A of Chapter 2 of the Act applied to four of the six transactions and assessed additional duty accordingly.
Notably, double duty may apply under the sub-sale provisions where:
a person enters into a contract to sell or transfer the property to another person;
a person other than the first purchaser obtains the right to have the property or any part of it transferred to them on completion of the sale contract;
land development occurs after the sale contract is entered into but before the transfer right is obtained by the subsequent purchaser; and
the vendor transfers the property or any part of it to the subsequent purchaser.
Mr Ramaihi objected to the assessments, principally arguing that:
the transfer right in respect of each property had been obtained at or before the time the relevant contract of sale was entered into and therefore before the land development occurred; and
in relation to one property, the contract was conditional on obtaining a planning permit and was not entered into for the purposes of the sub-sale provisions until that condition had been satisfied.
Section 32I & 32J
Section 32I of the Act sets out the circumstances in which a person obtains a ‘transfer right’ and provides that each time a transfer right is obtained, a ‘subsequent transaction’ occurs.
Where land development is involved, section 32J(3)(b) makes the timing of that subsequent transaction critical to determining whether additional duty is imposed.
Transfer Rights and Nominations
The Tribunal considered whether a nomination constitutes a ‘transfer right’ for the purposes of section 32I(1)(b) of the Act.
Consistently with Wilkinson and Sky Jade, the Tribunal found that a nomination under a contract of sale is capable of conferring on the nominee a right to have the relevant land transferred to it.
For each of the four relevant properties, a nomination was signed after the relevant Transferee had been incorporated and the nomination was otherwise valid and effective. Accordingly, each Transferee obtained its transfer right when it was nominated under the relevant contract.
Timing
A key issue was whether the Transferees could have obtained their transfer rights before they had been incorporated.
Mr Ramaihi argued that the rights arose before incorporation because the proposed directors of the Transferees had instructed him to bid for the properties on behalf of the unit trusts that were yet to be established.
The Tribunal rejected this argument. The existence of the Transferee at the relevant time was essential to the operation of section 32I. A corporate trustee that had not yet been incorporated was not a ‘person’ capable of obtaining or holding the relevant transfer right.
In reaching this conclusion, the Tribunal also noted that:
the contracts did not indicate that Mr Ramaihi was entering into them on behalf of the Transferees, but instead gave him a right to nominate another person as co-purchaser or substitute purchaser;
there was no evidence that the vendors understood Mr Ramaihi to be contracting on behalf of the Transferees;
the identity of each Transferee appeared not to have been determined until accounting advice was subsequently obtained;
the Transferees were ultimately nominated under the contracts rather than adopting the contracts as their own; and
there was no documentary evidence establishing that the contracts had been ratified by the Transferees.
The Tribunal therefore concluded that the Transferees did not obtain their transfer rights until they had been incorporated and subsequently nominated.
Outcome
The Tribunal concluded that the Commissioner had correctly assessed duty under the sub-sale provisions in respect of the four transactions.
Importantly, the Transferees could not obtain a transfer right before they had been incorporated. Their transfer rights were instead obtained when they were subsequently nominated under the relevant contracts of sale.
As the planning permit applications constituting land development had been lodged before those nominations occurred, the requirements for the relevant sub-sale duty provisions were satisfied.
Takeaways
Ramaihi is another important reminder that the timing of nominations and land development can have significant duty consequences.
In particular, a purchaser should not assume that an intention to nominate a company, trustee or other entity at a later date means that entity has acquired a transfer right from the outset. Where the proposed nominee does not yet exist, Ramaihi provides that it cannot obtain a transfer right until it has been established and the relevant right is subsequently conferred upon it.
If you are purchasing property and would like advice regarding the potential duty implications of the proposed transaction, 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
