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State Taxes Update – VIC, SA, ACT, WA

There have been a number of legislative amendments made or soon coming into effect in Victoria, South Australia, ACT and Western Australia as result of recent budget announcements.

Victoria

As part of a package of state taxation amendments, the Commissioner will include a new definition of “partnership interest” in the Duties Act so that a partner is deemed to have an underlying beneficial interest in the dutiable property owned by the partnership. Consequently, the transfer of such an interest is deemed to be a change in beneficial ownership of the interest and subject to duty.

The Commissioner has also included certain clarifying provisions in:

  • The landholder duty tracing provisions to ensure that a partnership is a linked entity that can be traced through to private landholders; and
  • The corporate reconstruction provisions allowing relief where a partnership is part of a corporate group.
    These provisions will take effect on 14 June 2018.

There are other relief provisions in the state taxation amendments for homebuyers. In particular, a foreign purchaser buying with an Australian spouse or domestic partner will no longer be subject to foreign surcharge duty. There are also some provisions in relation to the transfer of a partial interest to an apparent purchaser and the confirmation that a mortgage will be disregarded where there is a transfer between spouses or domestic partners of their principal place of residence.

Finally, separate foreign interests in a foreign corporation or trust will now be aggregated so that unrelated foreign interests will be added together to give majority control even if they are held independently.

South Australia

As of 1 July 2018, non-residential and non-primary production land transfers in South Australia will no longer be subject to duty.

ACT

A point of consumption wagering tax will be introduced from 1 January 2019. The tax will be set at a rate of 15% of the net wagering revenue received by betting operators for bets placed in the ACT, or bets made by ACT residents.

The stamp duty for eligible first home buyers will be fully abolished from 1 July 2019. First home buyers with a household income below $160,000 will pay no stamp duty, regardless of the property’s value or whether they are buying a new or established property. At the same time, the payment of First Home Owner Grants will end.

From 1 July 2018, conveyance duty for commercial property transactions worth $1.5m and below will be fully phased out. As a result, around 70% of commercial property transactions will no longer be liable to pay duty.

The long term aim of the ACT Government is to reduce stamp duty and rely on land tax as the main revenue stream.

WA

The foreign surcharge rate to be introduced from 1 January 2019 will be increased to 7%.

This article was written by John Caravousanos, Partner.

John Caravousanos

P: +61 7 3169 4792

E: jcaravousanos@hwle.com.au

Important Disclaimer: The material contained in this publication is of a general nature only and is based on the law as of the date of publication. It is not, nor is intended to be legal advice. If you wish to take any action based on the content of this publication we recommend that you seek professional advice.