New guidelines have been released, which exempt certain non-resident purchasers from paying the additional 3% duty that applies to contracts, transactions and arrangements entered entered into from 1 July 2015.
In this article, we discuss what these new guidelines mean for non-resident investors and outline the eligibility criteria and the steps required to apply for the exemption.
Non-resident purchasers including, individuals, corporations or trustees of a foreign trust, that acquire residential property in Victoria, must pay an additional 3% duty on contracts, transactions and arrangements entered into and settled on or after 1 July 2015.
This additional duty applies to all transfers of residential property by foreign purchasers including, acquisitions of part interests in property and also includes leasing arrangements, transfers of interests in a deceased estate and transfer of residential property as a gift.
The new exemption procedures have been developed following extensive discussions by the Property Council and Urban Development Institute of Australia, with the Treasurer’s office and the SRO.
Under the new guidelines, the Commissioner may exercise his discretion to exempt a transaction from the additional 3% land transfer duty. The Commissioner may also choose to exempt a person who has a controlling interest in a foreign corporation or a substantial interest in the capital of a trust estate of a foreign trust.
The exemption is intended to apply to those whose commercial activities add to the supply of residential housing stock in Victoria through new developments or through re-developments.
Applications for the exemptions must be lodged in the form of a written submission and include information requested in the guidelines:
If you require any further information, please contact Stephen O’Flynn or your ShineWing Australia relationship partner to discuss whether you could benefit directly from the additional duty exemption.