New landholder duty proposals in Victoria

New landholder duty proposals in Victoria

Posted on Friday, April 27 2012 at 3:23 PM

Landholder duty proposals in Victoria jeopardise property investment, according to the Property Council of Australia.

Executive
director of international and capital markets Andrew Mihno says the Victorian
government’s draft Duties Amendment Bill 2012 will penalise property
trusts and drive property investment to other states because of high compliance
costs, sweeping taxing provisions and double duty.

“The property
industry supports modernizing landholder duty, but the draft bill will force
businesses to shelve property transactions,” he says.

“The industry is
concerned that the proposed law will discourage investment and force businesses
to look for opportunities outside the state.

“The proposals
are too broad and will catch ordinary contracts that have never been dutiable
in any state.
“These transactions aren’t taxed anywhere else in Australia. Unfortunately, the
measures also leave in place significant problems that hold back investment or
slug investors double duty.”
Key features of the bill include:

• The removal of the 60 per cent land
  rich ratio test.
• A company or unit trust will be a
  landholder if it holds land with a market value of $1 million or more in
  Victoria.
• Landholder duty applies to
  acquisitions of 90 per cent or more of listed companies and listed unit
  trusts.
• The concept of land has been
  broadened to include anything fixed to land, even if it’s only resting on
  its own weight.

“The Government
has a golden opportunity to fix these problems and stimulate further investment
in Victoria by aligning landholder unit trust rules with the company
provisions,” Minho says.

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