Following a series of amendments, the State Taxation Acts and Other Acts Amendment Bill 2023 has successfully navigated through the parliamentary process and now awaits royal assent. Once granted, the State Revenue Office (SRO) and other relevant information sources will be promptly updated to reflect the changes. Here’s a concise summary of the key provisions relating to Land Tax Apportionment and Windfall Gains Tax Transfer under the amended bill:
Changes to the Sale of Land Act 1962 and Property Law Act 1958:
From 1 January 2024, the Sale of Land Act 1962 and Property Law Act 1958 will undergo amendments with far-reaching implications. The primary modifications include:
Land Tax Apportionment Restrictions:
- The amended legislation will prohibit the apportionment of land tax between a vendor and purchaser in contracts of sale of land. However, an exception is made for high-value property transactions.
- High-value property transactions are defined as those exceeding $10 million in 2024, with subsequent adjustments based on the Consumer Price Index (CPI) in future years.
Restrictions on Windfall Gains Tax Transfer:
- The bill introduces a prohibition on passing windfall gains tax to a purchaser under a contract or option agreement. This restriction applies to agreements entered into after the windfall gains tax liability has been officially assessed.
Vendor Offence Provisions for Land Tax Apportionment and Windfall Gains Tax Transfer Restrictions:
- It will be deemed an offence for a vendor to engage in a contract of sale that attempts to obligate the purchaser to cover the vendor’s land tax or known windfall gains tax liabilities.
Transitional Provisions for Land Tax Apportionment and Windfall Gains Tax Transfer Restrictions:
- These amendments will not impact contracts of sale of land that were executed prior to 1 January 2024. The same applies to option agreements granting the right to enter into a contract of sale of land before the specified date for windfall gains tax.
These reforms signal a paradigm shift in the regulation of property transactions in Victoria, aiming to foster fairness and transparency. Stakeholders in the property market should stay informed about these changes, as they are poised to reshape the dynamics of land transactions and taxation in the state.
Date revised: 13 December 2023