Legal news
The Victorian State Government has introduced a highly anticipated bill to implement the new Commercial and Industrial Property Tax with only three months to go until the 1 July 2024 start date. Those looking to acquire commercial or industrial properties or plan restructures within existing corporate/family groups should consider the interaction of the new regime with existing taxes.
As we’ve noted previously, commercial and industrial properties sold or transferred on or from 1July 2024, will enter the new commercial and industrial property regime. Broadly, the regime will operate such that future transfers will not trigger land transfer (stamp) duty but rather the property will be subject to a (further) set of land tax, known as commercial and industrial property tax (CIPT).
On 24 January 2024, in Imbree v Chief Commissioner of State Revenue [2024] NSWCATAD 22 (Imbree) the NSW Civil and Administrative Tribunal (Tribunal) held land transfer (stamp) duty was payable with respect to transfer of property to a superannuation fund as the Deed was held to be an ‘agreement to transfer’ (and dutiable) and not a ‘transfer of property’ and therefore did not qualify for exemptions.
This is a cautionary tale for ensuring that discretionary trust deeds are amended correctly so that “foreign” land transfer (stamp) duty and land tax surcharges are not triggered. Unfortunately, in the decision of Khalil & Associates Pty Ltd ATF The George Khalil Family Trust v Chief Commissioner of State Revenue [2024] NSWCATAD 23 (Khalil), the NSW Civil and Administrative Tribunal (Tribunal) found the particular amendment did not prevent the triggering of such a surcharge.
Victoria has a wide range of significant State tax changes commencing 1 January 2024 which impact numerous individuals, businesses, and land holders. Many were introduced under the State Taxation Acts and Other Acts Amendment Act 2023 which received Royal Assent on 12 December 2023.
The Federal Government’s Mid-Year Economic and Financial Outlook 2023-24 (MYEFO) (released on 13 December 2023) has again raised the legality of the ability of the States to impose foreign purchaser land transfer (stamp) duty surcharge and foreign owner land tax (together, the foreign surcharges).
On 11 December 2023, the Victorian State Government released details available here (including a useful information sheet available here) on the design of the new annual commercial and industrial property tax set to eventually replace land transfer (stamp) duty (stamp duty) for qualifying properties.
It has been a long held view of the State Revenue Office (SRO) that if beneficiary loans are forgiven in connection with a distribution of real estate from a discretionary trust to a beneficiary, then the duty exemption in section 36A of the Duties Act 2000 (Vic) will not apply and the transfer will trigger land transfer (stamp) duty.
Without consultation, the Victorian Government has introduced the State Taxation Acts and Other Acts Amendment Bill 2023 (Bill) which will make a number of significant changes.
In our previous article, we discuss Revenue NSW’s announcement that it has determined that NSW surcharge purchaser duty and surcharge land tax are inconsistent with international tax treaties entered into by the Australian Federal Government and certain countries (Treaty Countries).
On 29 May 2023, Revenue NSW has updated its list of Treaty Countries to now include India, Japan, Norway and Switzerland.
The Victorian State Budget for the 2023-2024 year (Budget) brings with it a range of state taxation measures aimed at reigning in the Victorian Government’s surging debt, currently projected at $135.4 billion for the 2023-2024 tax year and set to grow to an “eye-watering” $171.4 billion in the 2026-2027
On 21 February 2023 Revenue NSW announced that it has been determined that NSW surcharge purchaser duty and surcharge land tax (Surcharge Provisions) are inconsistent with international tax treaties entered into by the Australian Federal Government with New Zealand, Finland, Germany, and South Africa (Treaty Countries).
The introduction of windfall gains tax under the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (Vic) (Act) has been highly controversial from the outset due to real concerns as to whether the tax truly captures a purported “windfall” by landowners who rezone land in Victoria and its punitive tax rate of 50% of such gains.
The High Court of Australia has dismissed the special leave application by the taxpayer, Vicinity Funds Re Ltd (Taxpayer) to appeal from a decision of the Court of Appeal of the Supreme Court of Victoria (Court of Appeal).
