Dutiable transactions - residential property exceeds $3 million

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• Overview

• Dutiable transaction

• Residential land

• Dutiable value

• Use of land

• Residential use

• Mixed use

• Large parcels of residential land

• No premium duty payable

Effective from 1 June 2004, premium property duty will be payable on dutiable transactions relating to residential land, where the dutiable value exceeds $3 million.

What is the rate?

The rate of duty chargeable is $150 490 plus $7 for every $100, or part, by which the dutiable value for the residential land exceeds $3 million.

Who is liable?

The purchaser or transferee.

When must duty be paid?

Generally for agreements for sale, duty is payable within 3 months of the date of exchange.

For transfers, where there is no associated agreement, duty is payable within 3 months of the date of first execution of the transfer.

In the case of an off the plan purchase, duty becomes payable within 3 months of the earliest of the following dates:

• completion of the agreement

• assignment of the whole or any part of the purchaser's interest under the agreement

• 12 months from the date of exchange.

Mixed use

Where a dutiable transaction in respect of residential land exceeds $3 million, but the land is used for both residential and other purposes, the Chief Commissioner may apportion the dutiable value of the land to determine the dutiable value of the residential component.

Once apportioned, if the dutiable value of the residential component exceeds $3 million, then the excess above $3 million (referred to as the premium value) is liable to duty at the rate of $7 per $100, or part. The remainder of the dutiable value, including the non-residential component, is liable to duty at the general rate under section 32 of the Duties Act.

Large parcels of residential land

Where a dutiable transaction relates to a parcel of residential land and the area of the land exceeds two hectares, premium property duty will only be payable if the dutiable value of a proportion of the land (the proportion that two hectares bears to the total area of the land) exceeds $3 million.

Once apportioned, the dutiable value in excess of $3 million is liable to duty at the rate of $7 per $100, or part. The remainder of the dutiable value of the transaction is liable to duty at the general rate under section 32 of the Duties Act.

Note: this type of apportionment does not apply where the land is used for both residential and other purposes and apportionment under Section 32B applies.

Select the 'start' button to find out if you are liable to duty at the premium rate.

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