The Commissioner for ACT Revenue has been unsuccessful before the ACT Supreme Court in appealing a matter concerning the dutiable value of what he argued to be “house and land packages” or “off the plan” purchase arrangements under the Duties Act 1999 (ACT).
In this case, the taxpayers signed contracts with the intention of obtaining a house in a new development in a suburb in Canberra. One contract was for the purchase of a block of land (Crown lease) for $81,000, and the other was with a developer for the building of a house on the land concerned for $352,900. Broadly, both contracts provided that the house was to be built before the land sale was completed, and that the sale would not be completed until the house was built.
The Commissioner assessed the contract with the seller of the Crown lease as a dutiable transaction, and assessed the value of the transaction as the total value of the lease and the related building contract. The amount of stamp duty assessed was id=”mce_marker”6,864.50 based on a dutiable value of $433,900. The taxpayers argued that duty was properly assessable on the land sale contract only and because the value of $81,000 was below the id=”mce_marker”00,000 threshold for ad valorem duty, only nominal duty was payable.
The Court concluded that the dutiable transaction was the land sale contract and that the monetary consideration for that contract was $81,000. It also found the taxpayer’s acceptance of obligations in respect of the building contract might have constituted non-monetary consideration for the land sale contract; however, it was unable to ascertain the value of such a consideration.
(Comr for ACT Revenue v Araghi and Dorsett [2013] ACTSC 43, ACT Supreme Court, Penfold J, 14 March 2013.)
[LTN 55, 21/3/13]