Revenue Legislation Amendment Bill 2017

Introduced: 13/6/2017By: Hon C Pitt MPStatus: PASSED

Housing & Renting Cost of Living Business & Economy Government & Elections

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Plain English Summary

This is an omnibus bill covering multiple policy areas.

Overview

This bill rolls several 2017-18 State Budget tax measures into one package. It extends the boosted $20,000 First Home Owners' Grant for another six months, introduces a new 1.5 per cent land tax surcharge on overseas-based landowners, tightens foreign buyer duty rules, and restores tenant protections against landlords passing on land tax on older commercial leases.

Who it affects

First home buyers, foreign property buyers, overseas-based landowners, and small businesses renting commercial premises under pre-2009 leases all see real changes. Conveyancers and landowners will also face new information-sharing and notification requirements.

First Home Owners' Grant extension

The temporary boost to the grant is extended so contracts to buy or build a new home signed between 1 July 2017 and 31 December 2017 qualify for $20,000 instead of the standard $15,000.

Boosted $20,000 grant extended by six months to 31 December 2017
Only applies to new homes (contracts to buy or build, or owner-builder foundations laid in period)

Absentee land tax surcharge

A new 1.5 per cent land tax surcharge applies to individuals who do not ordinarily live in Australia, on top of the existing rate for companies, trustees and absentees. It applies from midnight 30 June 2017.

1.5% surcharge on the portion of taxable land valued at $350,000 or more
Applies to individuals absent from Australia at 30 June or absent for more than 6 months ending 30 June
No change to existing objection, review and appeal rights

Foreign acquirer duty loopholes closed

The 3 per cent additional foreign acquirer duty (AFAD) is extended to catch foreign buyers using non-foreign agents or pre-registration companies to enter contracts, and to chattels sold with residential land.

AFAD now applies where a non-foreign agent buys for a foreign principal
AFAD applies where a foreign company ratifies a pre-incorporation contract
Duty base includes chattels (furniture, appliances, pool equipment) sold with the home
AFAD confirmed to apply to options and existing rights over AFAD residential land
3-year look-back: reassessment required if an entity becomes foreign within 3 years of the transaction

Land tax pass-through restored on older commercial leases

Retrospectively from 30 June 2010, the ban on commercial landlords directly recovering land tax from tenants on leases signed between 1 January 1992 and 30 June 2009 is restored, reversing the effect of the Court of Appeal's Vikpro decision.

Lease clauses requiring tenants to pay or reimburse the landlord's land tax are unenforceable on pre-existing leases
Tenants who already paid cannot reclaim the money just on this basis
Existing court orders requiring tenants to pay land tax remain enforceable
Residential tenancies and retail shop leases already had this protection

Trustees, ownership changes and ATO reporting

Land held by joint trustees of the same trust is assessed as one holding, people must lodge a new revenue form within a month of a land ownership change, and the Commissioner can now collect and disclose property transfer data to the Commonwealth.

Joint trustees of the same trust get a single land tax assessment
New approved revenue form must be lodged within 1 month of a change of land ownership
Commissioner can collect and share property transfer data with the Australian Taxation Office
Sharing supports the National Register of Foreign Ownership of Land Titles

How this affects you

Housing & Renting

•First home buyers signing a contract for a new home between 1 July and 31 December 2017 get $20,000 instead of $15,000Clause 21Extends the meaning of 'particular eligible transaction' so the boosted grant applies to contracts with a commencement date between 1 July 2016 and 31 December 2017.
•Foreign buyers cannot dodge the 3% foreign buyer surcharge by using an Australian agent or a yet-to-be-registered companyClauses 7, 9New section 240(2) and 241A impose AFAD on agency transactions where the principal is a foreign person and on pre-incorporation contracts where the company is a foreign corporation when the property is transferred.
•Foreign buyers pay the 3% surcharge on the value of furniture, appliances and pool equipment bought with the home, not just the land itselfClause 5AFAD residential land is extended to include chattels whose use is directly linked to, or incidental to, the use and occupation of the land.
•When you buy or sell land, you must lodge a new revenue form within a month and provide extra identity detailsClause 25New section 78(3)(c) requires a properly completed revenue form to be given to the Commissioner within 1 month after ownership of the land changed.

Cost of Living

•An extra $5,000 on the First Home Owners' Grant helps cover deposit and moving costs for people buying or building a new home in late 2017Clauses 20-21The temporary $20,000 grant is extended for eligible transactions entered into between 1 July 2017 and 31 December 2017.
•Small businesses renting commercial premises on leases signed between 1992 and 2009 are protected from being charged their landlord's land tax billClause 26New section 83A makes unenforceable any provision in a pre-existing lease requiring the lessee to pay or reimburse land tax.
•Overseas-based individuals who own Queensland land worth $350,000 or more pay an extra 1.5% land tax on top of the normal rateClauses 24, 29New schedule 3 imposes a surcharge of 1.5 cents for each $1 of taxable value above $349,999 for absentees.

Business & Economy

•Commercial landlords on pre-2009 leases lose the windfall the Court of Appeal's Vikpro decision gave them and cannot recover land tax directly from tenantsClauses 26-27Section 83A restores the prohibition retrospectively from 30 June 2010, but landlords who already recovered the money keep it.
•Conveyancers and property lawyers must collect and pass on additional transfer information about buyers and sellers for sharing with the Tax OfficeClauses 31-32New Part 8 Division 2 of the Taxation Administration Act authorises the Commissioner to collect reportable information and disclose it to the Commonwealth commissioner of taxation.
•Property developers and foreign investors face tighter rules, including a 3-year look-back that triggers the foreign buyer surcharge if a company or trust becomes foreign after the dealClause 14New sections 246AC, 246AD and 246AF require reassessment to impose AFAD where an agent, principal or company becomes foreign within 3 years of the transaction.

Government & Elections

•The State Revenue Commissioner gains clear legal authority to collect property transfer data and share it with the Australian Taxation OfficeClause 32New section 113C provides that the commissioner may collect reportable information and disclose it to the commissioner of taxation.
•The Government is using retrospective legislation to override a Court of Appeal ruling (Vikpro) and restore its original policy on commercial leases back to 2010Clause 27New section 100 provides that section 83A is taken to have had effect on and from 30 June 2010.
•The change supports the National Register of Foreign Ownership of Land Titles, giving the Commonwealth better data on who owns Australian propertyClause 32Reportable information means information about the transfer of freehold or leasehold interests reportable by the State under Commonwealth taxation administration law.

Bill Journey

Introduced13 June 2017

First Reading

Committee

Committee Report

Second Reading

In Detail

Third Reading

Royal Assent22 June 2017

Sectors Affected

Commercial Leasing Real Estate Residential Rental Public Administration Taxation

Classified using AGIFT/ANZSIC Australian government standards

Revenue Legislation Amendment Bill 2017

Plain English Summary

Overview

Who it affects

First Home Owners' Grant extension

Absentee land tax surcharge

Foreign acquirer duty loopholes closed

Land tax pass-through restored on older commercial leases

Trustees, ownership changes and ATO reporting

Bill Journey

Referenced Entities

Legislation

Organisations

Programs & Schemes

Roles & Offices

Sectors Affected

Source Documents