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    Reassessment of transfer duty—home concessions—where not all taxpayers comply with the conditions

    Public Ruling DA000.11.3
    Issued
    12 December 2016
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    A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.

    Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.

    What this ruling is about

    1. Section 8(2) of the Duties Act 2001 (the Duties Act) imposes transfer duty on the dutiable value of a dutiable transaction.
    2. Section 17(2) of the Duties Act provides that transfer duty is to be paid by the parties to the transaction (the taxpayers).
    3. Chapter 2, Part 9 of the Duties Act provides a number of concessions for transfer duty on certain dutiable transactions to assist taxpayers to acquire their homes or first homes. These concessions are subject to requirements relating to the occupation and disposal of the land (occupancy requirements).
    4. Sections 153 and 154 of the Duties Act require the Commissioner to reassess transfer duty in certain circumstances where the occupancy requirements are not satisfied.
    5. Under s.153 of the Duties Act, a taxpayer’s transfer duty concession is reassessed if they dispose of all or part of the land within a year after the occupation date1, other than because of an intervening event2. The taxpayer may retain a partial concession, based on the proportion of the year between their occupation date and the date of disposal, both days inclusive.
    6. Under s.154 of the Duties Act, transfer duty is reassessed in full as if the concession never applied if, other than because of an intervening event:
      1. the taxpayer’s occupation date is not within—
        1. one year after the transfer date3—for a dutiable transaction related to residential land
        2. two years after the transfer date—for a dutiable transaction related to vacant land
          or
      2. the taxpayer disposes4 of all or part of the land before their occupation date.
    7. The purpose of this public ruling is to explain the Commissioner’s practice in identifying the taxpayer to whom a reassessment under s.153 or s.154 of the Duties Act is issued where:
      1. a number of taxpayers have purchased residential land5 or vacant land6
      2. an assessment of transfer duty has been made based on at least one taxpayer receiving a concession under Chapter 2, Part 9 of the Duties Act
      3. that assessment has been paid
      4. at least one of the taxpayers who received a concession failed to satisfy the occupancy requirements and
      5. the reassessment was required under s.153 or s.154 of the Duties Act.

    Ruling and explanation

    1. Where an assessment of transfer duty has been paid and a reassessment has been made under s.153 or s.154 of the Duties Act, the Commissioner’s practice, in the first instance, is to issue the reassessment to those taxpayers whose actions or inactions directly triggered the reassessment.

    Example 1—Reassessment under s.153 of the Duties Act

    Mark and Jane are de facto partners and enter into a contract for the purchase of a home. Mark and Jane are both eligible for the transfer duty home concession for the transaction and pay the duty assessment accordingly. Mark and Jane both occupy the home within 1 year of the transfer date. However, Mark and Jane separate, and within 3 months of occupation, Mark moves out of the property and transfers his interest to Jane. Jane continues to reside in the property and eventually satisfies the occupancy requirements. A reassessment under s.153 of the Duties Act is issued to Mark, but not Jane.

    Example 2—Reassessment under s.154 of the Duties Act

    Jack and Dennis, two brothers, enter into a contract for the purchase of their first home. Jack and Dennis are both eligible for the transfer duty first home concession for the transaction and pay the duty assessment accordingly. Before occupation of the property, Dennis accepts a job overseas. Dennis never moves into the property and instead sells his share in the property to his parents. Jack moves into the home and subsequently satisfies the occupancy requirements. A reassessment under s.154 of the Duties Act is issued to Dennis, but not Jack.

    Date of effect

    1. This public ruling takes effect from the date of issue.

     

    Elizabeth Goli
    Commissioner of State Revenue
    Date of issue: 12 December 2016

    References

    Public Ruling Issued Dates of effect
    From To
    DA000.11.3 12 December 2016 12 December 2016 Current
    DA000.11.2 3 July 2012 1 July 2012 11 December 2016
    DA000.11.1 12 September 2011 12 September 2011 30 June 2012
    Supersedes Revenue Ruling DA23.2 2 January 2007 1 January 2007 23 February 2009

    Footnotes

    1. Defined in s.88 of the Duties Act. Also see ss.86 and 86B of the Duties Act.
    2. Defined in Schedule 6 of the Duties Act
    3. Defined in s.89 of the Duties Act
    4. Defined in s.154(2), (2AA), (2A) and (2B) of the Duties Act
    5. Section 86A of the Duties Act
    6. Section 86C of the Duties Act