Victorian State Budget

The State Taxation Acts Amendment Bill 2017 (Vic), introduced into the Victorian Legislative Assembly on 2 May 2017, gives effect to the various measures in the Victorian State Budget, including the Homes for Victorians' strategy. The Bill proposes to amend Victoria's taxation and valuation laws including the Duties Act 2000, First Home Owner Grant Act 2000, Land Tax Act 2005, Payroll Tax Act 2007, and the Taxation Administration Act 1997.

New duty and land tax changes in ACT

The Revenue Legislation Amendment Bill 2017 (ACT) has passed the ACT Legislative Assembly with amendments. The Bill amends the Duties Act 1999, Land Tax Act 2004 and Rates Act 2004 to give effect to decisions arising from the 2015-16 and 2016-17 ACT Budget which include:

·       changes to the method for calculating rates and land tax for residential unit subdivisions

·       the repeal of insurance duty legislation, and

·       a technical change to the rebate on rates for pensioners.

Victorian duty assessed on changes in beneficial ownership

The following recent stamp duty cases in Victoria considered whether certain transactions resulted in a “change in beneficial ownership” of property that resulted in a dutiable transaction:

·       The Supreme Court of Victoria in Rakmy Pty Ltd v Commissioner of State Revenue held that the transaction by which property ceased to be held by the Appellant as trustee of one trust (the first trust) and commenced to be held by the Appellant as trustee of a superannuation fund (which held 100% of the units in the first trust at the time of the transaction) involved a “change in beneficial ownership” such that the transaction is a dutiable transaction. The Court did however find that the Appellant was entitled to a proportionate concession from duty in relation to the value of the property pursuant to section 36B(3) of the Duties Act 2000 (Vic).

·       The Victorian Civil and Administrative Tribunal in Halabi v Commissioner of State Revenue has affirmed the stamp duty assessment issued by the Commissioner of State Revenue on the transfer of shares in a land rich company as the applicant failed to provide evidence demonstrating that there was no change in beneficial ownership.

Land tax cases

The following cases concern the assessment of land tax:

·       The Supreme Court of Victoria – Court of Appeal in CDPV Pty Ltd v Commissioner of State Revenue has dismissed the appeal against the decision of the Supreme Court of Victoria in a case concerning the primary production land tax exemption. The Supreme Court of Victoria had previously denied the primary production land tax exemption on the basis that the Applicant was not able to prove that the land was used primarily for cultivation for the purpose of selling the produce of cultivation.

·       The QLD Civil and Administrative Tribunal in Riverside Parklands Pty Ltd v Commissioner of State Revenue has confirmed the decision of the Commissioner of State Revenue to disallow the applicant’s objection in relation to the reassessment of land tax. The Tribunal held that for the purpose of determining the "averaged value" of land, no valuations existed for the previous two financial years as the land has been subdivided and there was a change to the title description.

·       The ACT Civil and Administrative Tribunal in Vincentia Sth Pty Ltd v Commissioner for ACT Revenue has affirmed the decision of the Commissioner for ACT Revenue to disallow the applicant’s objection to a determination of the unimproved value of the applicant’s land. The Tribunal held that the land was Commonwealth land and exempted from being rateable under section 8(b)(vii) of the Rates Act 2004 (ACT) until the date of the first Crown lease over the land. As the land was rezoned for commercial use when it became rateable, the higher valuation at the time it became rateable was correct.