When an original purchaser under a Contract of Sale of Land nominates a subsequent purchaser, care and planning must be taken to ensure that double duty is not incurred pursuant to the sub-sale provisions of the Duties Act 2000 (Vic).
Double stamp duty may be payable when:
1. land development occurs between the time the original purchaser enters into the Contract, and the time the subsequent purchaser is nominated; or
2. the subsequent purchaser pays or is liable to pay more consideration (money or something else of value) than that paid by the original purchaser under the original Contract.
Stamp duty would be payable on the dutiable value of the original contract and the subsequent transaction.
Land development is widely defined and may include:
– preparing or taking steps to register a plan of subdivision under the Subdivision Act 1988 (Vic);
– applying for or obtaining a planning permit under the Planning and Environment Act 1987 (Vic) or a building permit or for building approval under the Building Act 1993 (Vic) in relation to the land;
– doing anything in relation to the land that would require a permit;
– developing or changing the land in any way that would increase the land’s value.
Care must also be taken when nominating a subsequent purchaser to ensure that the terms of the Contract are observed including any time limits and fees payable.
For advice in relation to nominations or double stamp duty please contact Fleur Craig of Armour-Craig Legal on (03) 5636 4986 or fleur@armourcraiglegal.com.au.