Although there are differences in the stamp duty legislation of the States and Territories, in general terms duty is calculated on the dutiable value of a dutiable transaction of dutiable property. The dutiable value generally is the greater of “the consideration for” the dutiable transaction and the unencumbered value of the dutiable property.
The High Court has recently emphasised that the “consideration for” a dutiable transaction of dutiable property is not the same as the purchase price. The High Court upheld an earlier majority decision by it that the “consideration for” a dutiable transaction is that which is received by the Vendors so as to “move” the transfer to the Purchaser as stipulated in the Agreement.
In the earlier High Court decision, there was an agreement for sale of shares. Under this agreement the parties agreed that the vendors would ensure that the company declared a dividend before completion. Therefore the vendors received not only the purchase price for the shares but also a dividend from the Company. Duty was assessed on the combined purchase price for the shares and the amount of the dividend. The majority of the High Court held that the consideration which moved the transfer by the vendors to the purchaser of the shares which they owned in the Company was the performance by the Purchaser of the several promises recorded in the agreement in consequence of which the vendors received the combined sum of the purchase price and the dividend. It was only in return for that total sum (paid by the various steps and in the various forms required by the agreement) that the vendors were willing to transfer to the Purchaser the bundle of rights which their shareholding in the Company represented.
The “consideration for” on which duty was to be assessed was not just the purchase price but all of those things that moved the transfer of the shares from the vendor to the purchaser.
Similarly where a developer had entered into an agreement to purchase land from a Government authority where the obligations of the developer as the purchaser involved not only payments for the purchase of the land but also contributions to the Government authority for infrastructure and remediation of the site, it was not just the purchase price which was the consideration that moved the transfer of the land from the Government authority to the developer but also the performance by the purchaser of the several promises in the agreement in consequence of which the Government authority would receive the total of the several amounts of contributions set out in the applicable agreement. Thus the duty was to be calculated on the total amounts payable by the developer to the Government authority not just the purchase price for the land.
Despite the alarm expressed by some sections of the property industry there is nothing surprising in the decision given the principles established in the earlier High Court decision.