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Sub-Sales Involving Land Development

November 08, 2021 by Gessica Giordano

Under the sub-sale provisions of the Duties Act 2000 (the Act) double duty may be imposed under a contract of sale if there is a nomination of an additional or substitute purchaser (excluding a relative) involving land development.

Duty will be charged separately on the dutiable value under the contract between the vendor and the purchaser (First Purchaser) and under the subsequent transaction between the First Purchaser and the subsequent purchaser (Nominee).

To avoid the risk of double duty applying, the parties must ensure that no land development activity occurs by a party to the contract and nomination including activities by related parties, agents, associates or tenants between the signing of the contract and making the nomination.

Land development is broadly defined to include the following 6 limbs:

Other than limb (f), it is not necessary to show that there was an increase in value or a change in the utility of the land.

Given the risks of triggering the sub-sale provisions which are subject to the interpretation of land development by the State Revenue Office, prior to entering into a contract either seek to avoid a nomination by carefully considering who will be the ultimate purchaser or contact our office for advice.

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