The Commissioner for ACT Revenue has been unsuccessful before the ACT Court of Appeal 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).
The matter concerned the Commissioner’s assessment of stamp duty on so-called “interdependent land and building contracts” based on a land sale contract (Crown lease) and a related building contract (for a house). In this case, completion of the land sale contract was made interdependent upon completion of the building contract. The taxpayers argued that duty was properly assessable on the land sale contract only and as the value of $81,000 (for the Crown lease) was below the id=”mce_marker”00,000 threshold for ad valorem duty, only nominal duty was payable. The Commissioner had assessed stamp duty on the combined value of the land and house (ie $433,900). Essentially, the ACT Supreme Court in Comr for ACT Revenue v Araghi and Dorsett [2013] ACTSC 43 held that the dutiable transaction was the land sale contract only.
The Court of Appeal held the taxpayers were only liable to pay duty assessed under the Duties Act in respect of the consideration paid by them for the purchase of the Crown lease (ie $81,000). In doing so, the Commissioner’s appeal was dismissed.
(Comr of ACT Revenue v Araghi & Anor [2013] ACTCA 54, ACT Court of Appeal, Murrell CJ and Burns and Cowdroy JJ, 20 December 2013.)
[LTN 3, 7/1/14]
ACT Revenue accepts Araghi ruling
The ACT Revenue Office has noted the recent decision of the ACT Court of Appeal in Comr of ACT Revenue v Araghi & Anor [2013] ACTCA 54 (handed down on 20 December 2013). The judgment concerned the correct amount of duty payable under the Duties Act 1999 (ACT) with respect to the sale of a property and the construction of a home in the suburb of Crace. The Commissioner had assessed stamp duty on the combined value of the land and house. However, the Court of Appeal ruled that the taxpayers were only liable to pay duty assessed under the Duties Act in respect of the consideration paid by them for the purchase of the Crown lease.
In light of the judgment, the ACT Revenue Office says the Commissioner will assess transactions similar to the Crace arrangements accordingly, and will accept applications for reassessment of those contracts within a limited time and subject to certain conditions. Applications must be received in time to enable any reassessment to be issued within 5 years of the original assessment. Applications must also contain all required information. Further information is available on the ACT Revenue Office website.
[LTN 12, 20/1/14]