Following the recent State budget, the Victorian government has introduced proposed amendments to the Duties Act 2000 that are likely to have a major impact on property developers.
The State Taxation Acts Amendment Bill 2019 contains provisions that operate so that developers will be required to pay duty where they acquire an “economic entitlement” in land in Victoria valued at more than $1 million.
There currently are such provisions where a person acquires an interest of 50% or more in such land.
Under the proposed changes, a person will be assessed to duty as if the person has acquired an interest in underlying property if the person will be directly or indirectly entitled to participate in:
- the income, rents or profits;
- the capital growth;
- the proceeds of sale;
related to the property.
The duty liability also arises if the person is entitled to receive any amount determined by reference to those amounts or to is entitled to acquire any entitlement to any of those amounts.
These provisions may affect you or your clients looking to engage in any arrangement involving the development of property.
Please call Patrick Cussen or Rob Warnock if you want to discuss these proposed changes.