Advertisement

Stamp Duty refunds for the North

By 21 January 2014 6

If you bought a house and land package before 2011 in the north part of Canberra, and paid stamp duty on both, you might have a major windfall coming your way as the ACT government declines to go the High Court and appeal the decision by the ACT Court of Appeal.

The Court of Appeal upheld Supreme Court Justice Hilary Penfold’s decision in March 2013 in favour of the couple – itself upholding an earlier Civil and Administrative Appeals Tribunal ruling – after the two federal public servants claimed the territory could only impose stamp duty on the land, valued at $80,000, not the whole $430,000 house-and-land package.

The decision meant a stamp duty bill of $16,800 was slashed to just $20 after the reduction left them eligible for a first-home buyer’s stamp duty concession.

Justice Penfold had upheld the tribunal’s view that the house should not be taxed because there were separate contracts, with separate parties, to buy the land and build the home.

Source: http://www.canberratimes.com.au/act-news/act-government-loses-stamp-duty-case-20140120-31546.html

Please login to post your comments
6 Responses to Stamp Duty refunds for the North
#1
mooo_cow12:11 pm, 21 Jan 14

Apparently, you only have 5 years for a reassessment of your original stamp duty according to the ACT Revenue Office website:

http://www.revenue.act.gov.au/interest-and-penalties/crace-contracts

According to the site, “it should be noted that the Commissioner’s discretion to reassess is limited by legislation to a period of five years from the date of the original assessment (section 9 of the Taxation Administration Act 1999). Transactions that fall outside this limitation period will not be reassessed.”
Although I am no law expert I feel that this is another miss interpretation of the law by the ACT Revenue Office. Section 9.3 (B) from the extract below would come into effect.

“(3) The commissioner must not make a reassessment of a tax liability more than 5 years after the initial assessment of the liability, unless—
(a) the purpose of the reassessment is to give effect to a decision on an objection or appeal as to the initial assessment; or
(b) at the time the initial assessment or a reassessment was made, all the facts and circumstances affecting the liability under the relevant tax law of the person in relation to whom the assessment or reassessment was made were not fully and truly disclosed to the commissioner.”

One could say that at the time the original assessment was made the ACT Revenue Office, they clearly did not have all the facts and circumstance affecting the stamp duty liability, for at the end of the day the ACT Revenue Office have incorrectly applied the facts/law. So this should allow the Commissioner to make reassessments that are older than five years.

#2
zorro292:02 pm, 21 Jan 14

Is this just for people who purchased in Crace? The website seems to suggest that….

I was charged for stamp duty on a house and land package in Macgregor with a similar arrangement (where the land was $220k but overall package was $415k meaning some $14k of stamp duty rather than $20)

Any rioters know any further details? Like if it applies to other areas and, if not, why not?

:)

#3
Mordd10:04 pm, 21 Jan 14

zorro29 said :

Is this just for people who purchased in Crace? The website seems to suggest that….

I was charged for stamp duty on a house and land package in Macgregor with a similar arrangement (where the land was $220k but overall package was $415k meaning some $14k of stamp duty rather than $20)

Any rioters know any further details? Like if it applies to other areas and, if not, why not?

:)

Well the article does say: “The couple’s lawyer Allan Nelson welcomed the victory on Monday and advised other purchasers of house-and-land packages to check the fine-print on their contracts.” – so if you think you even *might* be in a similar situation, my first step would be to call the lawyer who represented the couple who just won and ask them to take a look at your contracts to see if the wording is similar enough to qualify or not. It all seems to come down to how the contracts were worded originally, and there’s probably too many different possibilities for them to be able to give any more specific advice than “contact a lawyer” to see if you qualify as well.

#4
JC7:15 am, 22 Jan 14

zorro29 said :

Is this just for people who purchased in Crace? The website seems to suggest that….

I was charged for stamp duty on a house and land package in Macgregor with a similar arrangement (where the land was $220k but overall package was $415k meaning some $14k of stamp duty rather than $20)

Any rioters know any further details? Like if it applies to other areas and, if not, why not?

:)

The bit that is missing in the article is the people brought either an apartment unit or a joined town/terrace house (cannot remember which) off the plan where the actual building containing more than one home was built as one, not as separate buildings. The developer has then somehow managed to divide the cost of the land and the cost of the building by the number of home units, (hence why the land cost was a ridiculously low $80,000) and then the buyers brought off the developer under split contracts, one for the land, subject to stamp duty and one for the building.

Clearly there must have been a loop hole that has been exploited. The builder himself would have had one contract to build the whole complex, so how on earth could it be split?

Now compare to what you would have done, there would clearly be one contract for your standalone parcel of land, at a cost greater than $80k no doubt which is subject to stamp duty. You would have then had another contract for a standalone building that you clearly contracted the builder to build, not subject to stamp duty.

#5
PantsMan7:35 am, 22 Jan 14

And anyone that falls outside of the statute of limitations should apply for a Act of Grace payment: http://www.austlii.edu.au/au/legis/act/consol_act/fma1996164/s130.html

#6
zorro299:39 am, 22 Jan 14

thanks guys….I’ll investigate further (can’t hurt)! :)

Sponsors
RiotACT Proudly Supports
Advertisement
Copyright © 2014 Riot ACT Holdings Pty Ltd. All rights reserved.