State Taxation Acts Amendment Act 2012

Authorised by the Chief Parliamentary Counsel Authorised Version i State Taxation Acts Amendment Act 2012 No. 42 of 2012 TABLE OF PROVISIONS Section Page PART 1—PRELIMINARY 1 1 Purposes 1 2 Commencement 2 PART 2—DUTIES ACT 2000 3 Division 1—Aggregation of certain dutiable transactions 3 3 Aggregation of certain dutiable transactions 3 4 New section 24A inserted 4 24A Dutiable transactions relating to vacant land and construction of residential premises—where not constructed 4 Division 2—Parallel Arrangements 7 5 Application of Division—Additional consideration 7 Division 3—Motor Vehicle Duty 8 6 What is the rate of duty? 8 7 Incapacitated war veteran's vehicle 9 Division 4—Removal of exemption from duty for grants of Crown land 9 8 New section 51 substituted 9 51 Public rights of way 9 PART 3—NATIONAL TAXATION REFORM (CONSEQUENTIAL PROVISIONS) ACT 2000 10 9 Definitions 10 10 Voluntary GST equivalent payments 10 PART 4—REPEAL 12 11 Repeal of amending Act 12 ═══════════════ ENDNOTES 13 -- 1 of 14 -- Authorised by the Chief Parliamentary Counsel Authorised Version 1 State Taxation Acts Amendment Act 2012 † No. 42 of 2012 [Assented to 27 June 2012] The Parliament of Victoria enacts: PART 1—PRELIMINARY 1 Purposes The purposes of this Act are— (a) to amend the Duties Act 2000— (i) to replace the Commissioner of State Revenue's discretion not to aggregate dutiable transactions with a specific exception to the aggregation of dutiable Victoria -- 2 of 14 -- Part 1—Preliminary State Taxation Acts Amendment Act 2012 No. 42 of 2012 2 Authorised by the Chief Parliamentary Counsel transactions where vacant land is purchased by home builders; and (ii) to make provision in Part 4A for certain parallel arrangements (including parallel home building contracts); and (iii) to remove the specific exemption from duty for a grant of Crown land; and (iv) to increase the rate of duty payable on new and near new passenger cars, the dutiable value of which does not exceed the luxury car tax threshold; and (v) to extend the exemption from motor vehicle duty to certain veterans assessed under the Military Rehabilitation and Compensation Act 2004 of the Commonwealth; and (b) to amend the National Taxation Reform (Consequential Provisions) Act 2000 to provide for the payment of penalties and interest in relation to the State's notional GST liabilities. 2 Commencement (1) This Act (other than Division 3 of Part 2 and Part 3) comes into operation on the day after the day on which it receives the Royal Assent. (2) Division 3 of Part 2 and Part 3 come into operation on 1 July 2012. __________________ s. 2 -- 3 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 3 Authorised by the Chief Parliamentary Counsel PART 2—DUTIES ACT 2000 Division 1—Aggregation of certain dutiable transactions 3 Aggregation of certain dutiable transactions (1) For section 24(2) of the Duties Act 2000 substitute— "(2) Dutiable transactions are not to be aggregated under this section if the Commissioner is satisfied that— (a) the items or parts of dutiable property to which the dutiable transactions relate are comprised of vacant land; and (b) the transferee is registered as a domestic builder under the Building Act 1993 and is a builder within the meaning of the Domestic Building Contracts Act 1995; and (c) the transferee intends to construct residential premises on the vacant land for the purpose of selling that land to the public.". (2) After section 24(6) of the Duties Act 2000 insert— "(7) The Commissioner may treat land as vacant land for the purposes of this section if the Commissioner is satisfied that the land is substantially vacant apart from there being the remnant of any building, or any other object or structure, that the Commissioner is satisfied has been preserved because of its heritage significance.". See: Act No. 79/2000. Reprint No. 8 as at 1 August 2011 and amending Act Nos 67/2010, 61/2011 and 69/2011. LawToday: www. legislation. vic.gov.au s. 3 -- 4 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 4 Authorised by the Chief Parliamentary Counsel 4 New section 24A inserted After section 24 of the Duties Act 2000 insert— "24A Dutiable transactions relating to vacant land and construction of residential premises—where not constructed (1) Dutiable transactions in respect of vacant land that would have been aggregated under section 24(1) but were not aggregated because of section 24(2) are chargeable with duty in accordance with this section if any of the following occurs in respect of the land— (a) another dutiable transaction occurs in respect of the vacant land and at the time that the other dutiable transaction occurs no residential premises that are ready for occupation as a place of residence have been constructed on the land by the transferee; (b) premises other than residential premises have been constructed on the vacant land and those premises are ready for occupation or use for the purposes for which they were constructed; (c) the transferee has not constructed residential premises on the vacant land that are ready for occupation as a place of residence within 5 years after the date on which the land was transferred to the transferee. (2) If duty is chargeable under subsection (1), the Commissioner may reassess duty on the transactions. s. 4 -- 5 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 5 Authorised by the Chief Parliamentary Counsel (3) The duty chargeable under this section is calculated as follows— (a) firstly, aggregate the dutiable transactions that would have been aggregated under section 24(1) but were not aggregated because of section 24(2), as if the dutiable value of each dutiable transaction is the same as it was at the time of the dutiable transaction; and (b) secondly, calculate the duty that would be payable on the dutiable value of the aggregated dutiable property; and (c) thirdly, apportion the amount of duty that would be payable on the aggregated dutiable property to each dutiable transaction that would have been aggregated but was not; and (d) the amount of duty payable for each dutiable transaction that is chargeable with duty under subsection (1) is the amount apportioned to it under paragraph (c), less an allowance for any duty already paid in respect of that transaction. Example On 1 September 2012, a builder acquires 10 lots of vacant land by completing 10 dutiable transactions. The value of each dutiable transaction is $100 000. The transactions would have been aggregated under section 24(1) and duty would have been calculated on an aggregated amount of $1 000 000. However, the builder intends to construct residential premises on each lot of vacant land. Section 24(2) applies and the transactions are not aggregated and duty is calculated on each transaction separately. s. 4 -- 6 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 6 Authorised by the Chief Parliamentary Counsel On 1 September 2015, the builder on-sells two of the lots without building residential premises on them. Duty is calculated in the following way. The 10 dutiable transactions are aggregated based on the dutiable value of the dutiable transactions at the time they occurred (10 lots x $100 000 = $1 000 000). The duty that would be payable on the dutiable value of the aggregated property is then apportioned to each dutiable transaction. The builder is re-assessed for duty in respect of each lot the builder on-sold, less an allowance for each lot for the duty previously paid on it. The builder must pay the difference in respect of each on-sold lot. (4) A liability for duty charged under this section arises— (a) in the case of subsection (1)(a)— when the other dutiable transaction occurs; (b) in the case of subsection (1)(b)— when the premises are ready for occupation or use for the purposes for which they were constructed; (c) in the case of subsection (1)(c)— 5 years after the date on which the land was transferred to the transferee. (5) A reassessment referred to in subsection (2) is authorised if more than 5 years have passed since the initial assessment was made. Note Section 9(3) of the Taxation Administration Act 1997 allows a reassessment to be made more than 5 years after the initial assessment if this is authorised by a taxation law. (6) If dutiable transactions would have been aggregated under section 24(1) but were not aggregated because of the operation of section 24(2), the transferee must lodge written notice with the Commissioner within 30 days after becoming aware that any of the s. 4 -- 7 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 7 Authorised by the Chief Parliamentary Counsel circumstances set out in subsection (1) have occurred in respect of any of those transactions. (7) A failure of a transferee to comply with subsection (6) does not affect the Commissioner's power to reassess duty under this section.". Division 2—Parallel Arrangements 5 Application of Division—Additional consideration (1) In section 32B(4) of the Duties Act 2000 insert the following definition— "parallel arrangement means an arrangement entered into by a subsequent purchaser or an associate of the subsequent purchaser before, at the time or within 12 months after the subsequent purchaser obtains a transfer right under a sale contract, under which the following occurs— (a) if the subsequent purchaser obtained the transfer right from a first purchaser—the first purchaser or an associate of the first purchaser is required to construct, or to arrange for the construction of, improvements to the property the subject of the sale contract for consideration; or (b) if the subsequent purchaser obtained the transfer right from another subsequent purchaser—the other subsequent purchaser or an associate of the other subsequent purchaser is required to construct, or to arrange for the construction of, improvements to the property the subject of the sale contract for consideration.". s. 5 -- 8 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 8 Authorised by the Chief Parliamentary Counsel (2) After section 32B(4) of the Duties Act 2000 insert— "(5) For the purposes of the definition of additional consideration in subsection (4), a subsequent purchaser or an associate of a subsequent purchaser who enters into a parallel arrangement is taken to have given or agreed to give the consideration under that arrangement in order for the subsequent purchaser to obtain the transfer right in addition to any other consideration given or agreed to be given in order for the subsequent purchaser to obtain the transfer right. (6) For the purposes of subsections (4) and (5), section 32V(3) does not apply in determining the consideration under a parallel arrangement. Note Section 32V(3) provides that consideration does not include any amount paid or payable in respect of the construction of a building to be constructed on land on or after the date of the relevant transaction.". Division 3—Motor Vehicle Duty 6 What is the rate of duty? In section 218(1) of the Duties Act 2000— (a) after paragraph (a)(i) insert— "(ia) for any other passenger car—$6 per $200, or part, of the dutiable value of the motor vehicle;"; (b) in paragraph (ab), for "$5" substitute "$6". s. 6 -- 9 of 14 -- Part 2—Duties Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 9 Authorised by the Chief Parliamentary Counsel 7 Incapacitated war veteran's vehicle At the end of section 233E of the Duties Act 2000 insert— "(2) No duty is chargeable under this Chapter on an application for registration or transfer of registration of a motor vehicle not used except for social, domestic or pleasure purposes registered or to be registered in the name of a person who— (a) is assessed under Part 2 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004 of the Commonwealth as a person who has suffered an impairment resulting from one or more service injuries or diseases, the degree of which constitutes 40 impairment points or more; and (b) operates no other vehicle currently registered without fee as an incapacitated war veteran's vehicle in accordance with regulations made under the Road Safety Act 1986.". Division 4—Removal of exemption from duty for grants of Crown land 8 New section 51 substituted For section 51 of the Duties Act 2000 substitute— "51 Public rights of way No duty is chargeable under this Chapter in respect of the dedication of a free and perpetual right of way to the use of the public.". __________________ s. 7 -- 10 of 14 -- Part 3—National Taxation Reform (Consequential Provisions) Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 10 Authorised by the Chief Parliamentary Counsel PART 3—NATIONAL TAXATION REFORM (CONSEQUENTIAL PROVISIONS) ACT 2000 9 Definitions In section 3 of the National Taxation Reform (Consequential Provisions) Act 2000 insert the following definitions— "GST law has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth; interest means the general interest charge the liability for which arises under the Taxation Administration Act 1953 of the Commonwealth and which would otherwise be payable if the GST law applied to a State entity; penalties means any penalties imposed in respect of GST by Part 4-25 of Schedule 1 to the Taxation Administration Act 1953 of the Commonwealth and which would otherwise be payable if the GST law applied to a State entity;". 10 Voluntary GST equivalent payments At the end of section 5 of the National Taxation Reform (Consequential Provisions) Act 2000 insert— "(2) Without limiting subsection (1), a State entity may also pay to the Commissioner of Taxation amounts representing amounts that would have been payable as penalties or interest in respect of amounts paid under subsection (1) if— (a) the imposition of that GST were not prevented by section 114 of the Commonwealth Constitution; and See: Act No. 6/2000 and amending Act No 28/2007. LawToday: www. legislation. vic.gov.au s. 9 -- 11 of 14 -- Part 3—National Taxation Reform (Consequential Provisions) Act 2000 State Taxation Acts Amendment Act 2012 No. 42 of 2012 11 Authorised by the Chief Parliamentary Counsel (b) section 5 of each of the GST Imposition Acts had not been enacted.". __________________ s. 10 -- 12 of 14 -- Part 4—Repeal State Taxation Acts Amendment Act 2012 No. 42 of 2012 12 Authorised by the Chief Parliamentary Counsel PART 4—REPEAL 11 Repeal of amending Act This Act is repealed on 1 July 2013. Note The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the Interpretation of Legislation Act 1984). ═══════════════ s. 11 -- 13 of 14 -- State Taxation Acts Amendment Act 2012 No. 42 of 2012 13 Authorised by the Chief Parliamentary Counsel ENDNOTES † Minister's second reading speech— Legislative Assembly: 2 May 2012 Legislative Council: 19 June 2012 The long title for the Bill for this Act was "A Bill for an Act to amend the Duties Act 2000 and the National Taxation Reform (Consequential Provisions) Act 2000 and for other purposes." Endnotes -- 14 of 14 --