As set out in the recent controversial Victorian Budget, the State Taxation Acts Amendment Bill 2019 (Vic) contains amendments that will introduce the imposition of duty on fixtures.
The amending bill is currently being debated in the upper house, and if passed, will mean that the day after royal assent is received:
Any transfers of fixtures with the value $2 million and over will be subject to duty
As a result, duty will be triggered on a transfer solely of ‘fixtures’ - i.e. even where the items are held separately from the underlying land.
Importantly, the definition of ‘fixtures’ is broader than the common law definition as it includes any item fixed to land, including tenant’s fixtures.
Any duty imposed is to apply at a phasing in rate for fixtures valued from $2 million to $3 million, with full duty being payable on the transfer of fixtures valued over $3 million. Notably, the amendments specifically provide that dutiable transactions involving such fixtures are not to be aggregated.
Fixtures will be brought into the net of landholder duty
The value of fixtures will count as land for the purposes of landholder duty, even where they are tenant’s fixtures held separately from the land.
These amendments should be front of mind where any transactions involving items fixed to land are concerned (either held directly or indirectly), especially given that the amendments may be in effect soon.
If you have any questions, please contact one of the members of our specialist team: