The 2019 Victorian State Budget announced an increase in the total tax to be collected in relation to property transactions within the State. The changes are as follows;
1. Changes to the “economic entitlement” provisions of the Duties Act 2000 (Vic). The economic entitlement provision initially only appied to arrangements where a private landholder most commonly a private company or trust entered into a property transaction whereby the private entity was entitled to an interest of 50% or more in the land. Furthermore, prior to the recent amendments the arrangement needed to involve all the land owners landholdings. However, this will not be the case going forward, as the Victorian government plans to charge private landhollders irrespective of the nature of the entity and whether the entire landowners land holdings were being transacted, transfer duty on all transactions where the land is valued at over $1,000,000.
According, to recent publications by the Victorian State Revenue Office (SRO) the following private arrangements are exempt from the additional tax; – where a person provides a service in relation to the land and that person is normally engaged to perform these duties on a fulltime basis the agreed rate is within industry standards the person performing the service is unrelated to all individuals who have an monetary benefit over the land.
2. As of 1 July 2019, foreign purchasers of residential dwellings in victoria will be required to pay an additional 8% in transfer duty.
3. As of 1st January 2020, all absentee land owners in Victoria will be charged an additional 2% in tax.
4. From 1 July 2019, a Stamp duty concession will be afforded to those who purchase commercial and or industrial property in Regional Victoria. Initially a 10% concession will be awarded to those eligible with the concession increasing to 50% of the property value by the 1st July 2023.
Speak to the friendly team at Conveyancer.com.au to find out how the above changes may affect you today.