Stamp Duty Latest Updates

Bill stalled on proposed Victorian stamp duty amendments to leasing arrangements

On 10 March 2009, the Duties Amendment Bill 2008 was defeated in the Upper House, by a "reasoned amendment" proposed by the Coalition. The Council refused to pass the Bill 'until a public consultation process is undertaken to address widespread concern as to the impact and practicality of the proposed changes to the Duties Act 2000'.

This comes after the Victorian Government's recent announcement that it would limit the application of the proposed stamp duty measures contained in the Bill, which was then amended in the Lower House to include a specific exemption for leasing arrangements in respect of retirement villages.

While the Government's announcement seemed to provide relief for 'ordinary' leases, it did not provide any exemptions for ordinary retail, commercial and residential leases. The Government seemed adamant that issues arising in relation to these leases could be dealt with by the Commissioner of State Revenue, through rulings.

The Government's amendments to the Bill were not enough to provide the clarity sought by Victoria's taxpayers. While the retirement village exemption was welcomed, the amendments did not go far enough to provide the degree of certainty which taxpayers expect in order to transact with confidence and the Coalition is adamant that more public consultation is necessary before any further progress is made in respect of the Bill.

It will now be interesting to see if and how the Bill will progress and what the Bill will look like after the 'public consultation' process. Whatever form the Bill takes, it is likely that, as a minimum, the retirement village exemptions would be here to stay. What is also potentially likely to stay is the retrospective nature of the Bill which was to have effect from 21 November 2008, the date of the Government's announcement to close the long term lease 'loophole'.

The burning question, however, still is: How will the various other concerns in the Bill be addressed?