In brief - QCAT rejects objection to assessment by Office of State Revenue
What is "aggregation" in property transactions?
Under the relevant legislation, if dutiable transactions comprise substantially one arrangement, then transfer duty should be paid as if the transactions were one transaction. This is known as aggregation and typically results in a higher amount of duty being payable.
Criteria used to determine whether transactions comprise one arrangement
Section 30(4) of the Duties Act 2001
sets out a number of criteria (discussed below) that will be taken into account in determining whether transactions comprise substantially one arrangement.
(a) Whether the transactions are contained in one instrument
In this case, the buyer bought a number of properties from the same seller under separate contracts. There was no suggestion this criterion was met.
(b) Whether any of the transactions are conditional on entry into, or completion of, any of the other transactions
Here none of the separate contracts were conditional on each other, although they each contained a similar set of special conditions.
(c) Whether the parties to any of the transactions are the same
This was uncontroversial - the buyer and seller under each contract were the same.
(d) Whether any party to a transaction is a related person of another party to any of the other transactions
The QCAT member noted that the buyer and seller were not related for the purposes of the transfer duty legislation.
(e) The time over which the transactions take place
The contracts in this matter were each dated the same day and settled on the same day.
(f) Whether, before the transactions take place, the dutiable property the subject of the transactions was used together, or dependently with one another, by the transferor or transferors
The QCAT member was satisfied that the five separate land parcels were, until settlement of the contracts, held for a single purpose by the seller (i.e. redevelopment). The member made this finding even though each of the five parcels was leased to a separate tenant under leases with differing terms.
(g) Whether, after the transactions take place, the dutiable property the subject of the transactions will be used together, or dependently with one another, by the transferee or transferees
The QCAT member was satisfied that while the five parcels were not used dependently (i.e. there were no shared services or driveways), they were used together by the buyer for the purposes of investment, development and leasing.
QCAT upholds assessment by Office of State Revenue
The QCAT member noted that several of the criteria listed above were met, and also noted the five separate contracts were all entered into in similar circumstances (i.e. by private negotiation, as distinct from, for example, five auctions).
The QCAT member upheld the OSR's finding that, as a result of aggregation, additional transfer duty in the amount of $30,095.50 was payable. Unpaid tax interest was also applied.
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