Tax

A client settles a dispute for $1.5 million. If tax unexpectedly consumes a third of the settlement payment, the client will no doubt expect their solicitor to pay the shortfall. This article looks at four common ways tax might impact on settlements.

Since 1 July 2024, every section 32 statement in Victoria must carry new disclosures about the commercial and industrial property tax (CIPT). This applies to residential land too, not only commercial and industrial land.

Get the disclosure wrong and the purchaser can terminate the contract at any time before settlement. The vendor may also commit an offence.

Acting for a purchaser carries a different risk, because a purchaser needs to be aware whether the transaction will bring the property within the CIPT regime, whether the property is already within the CIPT regime, and if and when the CIPT annual tax will commence.

From 26 November 2025, the foreign purchaser additional duty rules applying to New Zealand citizens acquiring residential property in Victoria, have changed from a visa requirement to a residency requirement.

The LPLC has received claims against practitioners who expected a duty exemption on the transfer of farming real property but failed to meet all the necessary criteria, resulting in the exemption being denied.

This is a frequently asked GST question with a few twists.

'Foreign purchaser additional duty' (FPAD) provisions have now been in place in the Duties Act 2000 (Vic) (Vic Duties Act) since 2015.

From 1 March 2020, the Victorian State Revenue Office (SRO) changed its approach to FPAD in the context of acquisitions of residential property made by 'family' discretionary trusts. The change of approach has meant there has been, and will be, an increase in discretionary trusts found by the SRO to be foreign trusts liable to pay FPAD when acquiring residential property.

Practitioners practicing in conveyancing matters need to be aware of the way the FPAD regime works for discretionary trusts so that clients can be advised of its application.

Changes to stamp duty and the introduction of an annual property tax on commercial and industrial land under the Commercial and Industrial Property Tax Reform Act commenced 1 July 2024. Practitioners acting in matters involving commercial or industrial land in Victoria need to be aware of the full extent of these significant reforms.

LPLC has provided comprehensive information about the reforms in the article Commercial and Industrial Property Tax reform in Victoria — What you need to know, and a webinar Commercial and Industrial Property Tax (CIPT): Navigating the new reform.

Here we provide some additional answers to specific questions we have received from practitioners. We recommend practitioners use this information to gain a full understanding of the reforms and their practical application.

The Commercial and Industrial Property Tax Reform Bill (the Bill) was introduced into the Victorian Parliament on 20 March 2024. The reforms are expected to pass into law in early May before commencing on 1 July 2024 (Note: the Act was passed in the same terms as the Bill).

Common questions about the Vacant Residential Land Tax (VRLT) introduced in 2023 are answered below.

The new Windfall Gains Tax (WGT) introduced by the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 commenced on 1 July 2023 and in broad terms, applies to land in Victoria rezoned after 1 July 2023.

Practitioners need to be across this tax as it carries significant risk for clients and practitioners if it is not managed correctly.

We've put together information and resources to help practitioners understand the legislation, manage the associated risks and provide guidance about how to act now to avoid surprises later.

Practitioners should always be mindful of the potential tax consequences of a transaction. Each year the LPLC sees claims where the practitioner has overlooked the tax implications of a matter or considered that it’s not their role to advise on tax issues or recommend that the client obtain tax advice from a tax lawyer or accountant.

Practitioners advising on or transferring shares in a private company or units in a unit trust should be alert to potential duty consequences.

There are eligibility requirements for the exemption of duty when completing a transfer of real property between spouses or domestic partners. Clients should be advised clearly about these requirements, as the State Revenue Office (SRO) regularly audits these transactions and may seek payment of duty on the transfer, penalties and interest if there has been non-compliance.