News
The State Revenue Office provided direction on their website this week about the payment of duty on penalty interest and how it is to be practically administered so as to not hold up settlement.
Duty will be payable on penalty interest in Victoria for contracts entered into on or after 1 July 2022 if the penalty interest is $5000 or more. There are some exceptions to this set out on the SRO website. Purchasers have only 30 days after settlement to notify SRO by email at [email protected] and of the penalty interest and relodge the transaction for assessment.
You should:
- Read the information on the SRO website.
- Update your precedent first letter to purchasers noting that delays that result in penalty interest of $5000 or more will attract additional duty.
- Make sure that verification of identity is done early and any discrepancies in names on documents are resolved early so as not to delay settlement.
- Email the SRO at [email protected] with any questions.
It is worth noting that while duty will be payable on penalty interest the position has not changed for GST, in that there is no GST payable on penalty interest.
