Certain Leasing Arrangements Are Now Dutiable Transactions by the Duties Amendment Act 2009

The Duties Amendment Act 2009 (“the Amending Act”) received Royal Assent on 7 July 2009 and made the following leasing arrangements dutiable transactions from 21 November 2008:

1. a grant of a lease where consideration rather than rent reserved is paid or agreed to be paid either in respect of the lease, certain other rights or options, or an arrangement whereby the lessee or an associated person obtains an interest in the underlying land [section 7(1)(b)(v)]; and
2. a transfer or assignment of a lease for which any consideration is paid or agreed to be paid, either in respect of the transfer or assignment, or in respect of various other rights, options or arrangements [section 7(1)(b)(va)].

The term “rent reserved” is defined in the Amending Act to mean the rent paid or payable during the term of the lease and any amount paid or payable for the right to use the land under the lease.

For a dutiable lease transaction the dutiable value of the lease is the greater of:

• the consideration (other than the rent reserved) that is paid or agreed to be paid, and
• the unencumbered value of the underlying land.

section 7(1)(b)(v) and section 7(1)(b)(va) will not apply to granting, transfer, assignment of a lease creating or giving rise to a residency right in a caravan park or retirement village.

In addition, if a lessee has paid duty on a leasing arrangement then no duty is chargeable in respect of the subsequent transfer of land to the lessee.