Fighting for entitlements,
protecting interests

News » Current articles » Changes to Stamp Duty Applicable to the Acquisition of Units or Shares in Land Holding Entities

Changes to Stamp Duty Applicable to the Acquisition of Units or Shares in Land Holding Entities

 

On 1 July 2012 the Victoria "Duties Amendment (Landholder) Act 2012" came into operation. This new Act changes the way Victorian Stamp Duty is assessed on the acquisition of shares in companies and units in unit trusts that own land.

Prior to the introduction of the new Act, Stamp Duty was assessed on relevant acquisitions of interests in landholding entities which held land with an unencumbered value of at least $1 million and where the value of those landholdings constituted at least 60% of the total value of the entities assets (i.e. "land rich")

Under the new regime  it is no longer necessary for the entity to be "land rich" for duty to apply. Stamp Duty will now be assessed where the entity holds land with an unencumbered value of $1 million or more and where a relevant interest has been acquired (being 20% or greater amount of units in a private unit trust or 50% or greater of the shares in a private company).

The relevance of this new Stamp Duty regime is that clients acquiring interests in landholding entities have a lower threshold to achieve for Stamp Duty to be assessed on the acquisition.

We suggest you seek our advice if you are considering acquiring interests in a landholder entity and wish to know the Stamp Duty liability attaching to that transaction prior to entering into that transaction, in an effort to avoid exposure to an unexpected duty liability.

If you have any queries relating to this content or any other business law matter please contact Andrew Bini, Senior Business Lawyer  at abini@richbenn.com.au

Back to Current articles

Join our newsletter

For all the latest from Richmond & Bennison,
please subscribe to our newsletter.