Government to support innovation in South Australia

The Australian Government has announced that it will pilot a new visa initiative in South Australia, before a national rollout in 2019. Under this initiative, new visa arrangements will allow State Governments to partner with business incubators in attracting foreign entrepreneurs.

NSW legislative developments

The following New South Wales (NSW) legislative developments have occurred since the March edition of TaxTalk Monthly:

  • The State Debt Recovery Bill 2017 (NSW) has passed the NSW Parliament, and was given Assent on 21 March 2018. The Bill authorises the Chief Commissioner of State Revenue to take certain actions to recover various State debts without taking court action.
  • The NSW Governor-General has proclaimed that the un-commenced provisions of the State Revenue Legislation Amendment (Surcharge) Bill 2017 commenced on 5 March 2018. This includes the provisions relating to:
    • the exemption from, and refunds of, surcharge purchaser duty and surcharge land tax payable in respect of residential land by a foreign person that is an Australian corporation when the land is used for the construction of new homes or is subdivided and sold for the purposes of the construction of new homes, and
    • the manner of the small business declaration required for the purposes of the small business exemption from duty on an insurance policy.

Revenue NSW issues guidance on exemption from land tax surcharge

Revenue NSW has issued Revenue Ruling No. G 013, which relates to the surcharge concessions that are provided to Australian-based developers who are foreign persons, and sets out the matters which the Chief Commissioner will consider in determining whether an exemption from surcharge purchaser duty and surcharge land tax liability should be granted. The ruling also provides guidance on the circumstances in which the exemption may be revoked, and on the provision of refunds for surcharges where an exemption is granted after the surcharge has been paid.

NSW Court dismisses valuation appeal

The NSW Land and Environment Court in Olefines Pty Ltd v Valuer-General of New South Wales [2018] NSWLEC 18 has dismissed the Applicant’s appeal against the Valuer General’s decision on the basis the company failed to discharge the onus that the relevant land value determinations were too high in accordance with section 40(2) of the Valuation of Land Act 1916 (NSW).

Victorian tribunal finds land transfers not exempt from duty

The Victorian Civil and Administrative Tribunal in MD Commercial Pty Ltd v Commissioner of State Revenue [2018] VCAT 333 has confirmed the decision of the Commissioner and held that transfers of land for development purposes pursuant to the terms of a trust deed were not exempt from duty under section 35 of the Duties Act 2000 (VIC). Section 35 is concerned only with transactions which arise in the course of property being placed into, or removed out of, a bare trust by the owner of the property (‘the transferor’). In this case, the trust deed empowered the trustee not only to hold the land for the beneficiary, but also to sell, develop, and subdivide the land to third parties if it was so directed by the beneficiaries. The Tribunal found that the inclusion of the power for sale of the property by the trustee, when directed by the beneficiary, went beyond ‘holding’ the land for the transferor. As such, the exemption was unavailable.

WA taxpayer not entitled to land tax exemption

The State Administrative Tribunal of WA in EAMES v Commissioner of State Revenue [2018] WASAT 14 has affirmed the Commissioner of State Revenue’s decision, finding that the taxpayers were not entitled to an exemption under section 24A of the Land Tax Assessment Act 2002 (WA) which deals with ‘private residential property’ on land that was subdivided. Although the taxpayers and their spouses commenced occupancy of apartments on lots registered on the strata plan, by the time the building in this case was fit to be occupied as a place of residence, the Certificate of Title for the land in question had been cancelled and replaced with four strata lots.