A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.
Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.
A standard REIQ contract provides that the purchase price is $200,000. The sale is a sale where the real estate agent is engaged by the vendor and is the agent of the vendor. A special condition of the contract of sale provides that the purchaser will pay a commission to the real estate agent on the sale in addition to the purchase price. By applying s.12(1)(a), the consideration for this transaction is $200,000 plus the commission paid to the vendor’s agent.
A vendor owns a 1 hectare vacant block of land that has been sewered and had services delivered to its frontage by the Brisbane City Council (BCC). Those services were part of a development deed between the BCC and the vendor whereby the potential vendor was, by that deed, obliged to pay to the BCC $100,000 for the services. A purchaser contracts to purchase from the vendor that block of land for $1 million. Under a condition of the contract, the purchaser agrees to pay, on or before completion, to the BCC the outstanding $100,000. By applying s.12(1)(a), the consideration for this transaction is $1.1 million.
A vendor owns a vacant block of land. The land is subject to an outstanding land tax charge equal to $10,000. The vendor agrees to sell that land to a purchaser for $900,000. There is a special condition in the contract that the purchaser must pay the land tax. By applying s.12(1)(a), the consideration is $910,000.
A purchaser and vendor enter into a contract whereby the vendor sells to the purchaser a 1 hectare block of land (Blackacre) for a purchase price of $1 million. The vendor owns all the land surrounding Blackacre. The purchaser wants an easement for services to Blackacre through the land owned by the vendor. Accordingly, it is a condition of the contract of sale that the vendor will grant an easement to the purchaser, provided that the purchaser pays all the costs (e.g. legal costs, surveyor costs, stamp duty) incurred in granting the easement. These costs total $10,000. The completion of the contract is conditional on the condition relating to the easement being fulfilled.
The amount paid by the purchaser for the costs incurred by the vendor in granting the easement will not be added to the stated purchase price. The amount is not related to the transfer itself. It is related to the grant of the easement. When the easement is granted s.8 of the Duties Act imposes transfer duty on the grant and s.12(1)(a) will result in the payment of $10,000 being included in the consideration for the easement.
A special condition of a contract allows the purchaser to occupy the premises pending settlement and subject to the payment of rent or a licence fee. The payment of these monies does not relate to the conveyance of the property. In assessing duty, the special condition should be considered in its own right as a grant of a new right being an interest in land.
Commissioner of State Revenue
Date of issue: 24 February 2009
|Public Ruling||Issued||Dates of effect|
|DA012.1.1||24 February 2009||24 February 2009||Current|
|Supersedes Practice Direction DA 19.1||1 March 2002||1 March 2002||23 February 2009|