By Phillip Leaman

5 June 2019

The State Taxation Acts Amendment Bill 2019 has been passed into Parliament and shall receive royal asset any day now. Once approved by the Governor, the Act will take effect one day later.

Developers need to be aware of this Act as stamp duty will now, in most cases, be payable on what has been traditionally known as Development Agreements.

What is the Act about?

The State Taxation Acts Amendment Act 2019 principally puts an end to Development Agreements in relation to properties worth more than $1 million by extending the economic entitlement provisions of the Duties Act 2000 to all landowners not just private unit trusts and private companies.

Under the Act, an economic entitlement will be acquired if:

  1. An arrangement is made in relation to relevant land that has an unencumbered value that exceeds $1 million; and
  2. Under that arrangement the person is or will be entitled, whether directly or through another person, to any one or more of the following:

a. To participate in the income, rents or profit derived from the relevant land;

b. To participate in the capital growth of the relevant land;

c. To participate in the proceeds of sale of the relevant land;

d. To receive any amount determined by reference to the above; or

e. To acquire any entitlement described in the above.

It does not matter whether or not the person who acquires the economic entitlement is a party to the arrangement.

So what happens if there is an economic entitlement acquired?

You will be deemed to have acquired 100% of the beneficial ownership (and assessed stamp duty of 100% of the value) if:

  • The arrangement under which the economic entitlement is acquired does not specify the percentage of the economic entitlement obtained; or
  • The arrangement under which the economic entitlement is acquired, does specify the percentage of the economic entitlement but the party also is entitled to an other entitlement or amount payable to the person or an associate of the person; or
  • The arrangement allows the person to two or more entitlements set out above.

There is a phasing in duty amount for property valued up to $2 million.

What other matters does the new Act cover?

  • The foreign purchaser duty increases from 7% to 8%.
  • If you transfer fixtures (including tenants fixtures) duty will be payable if the unencumbered market of the fixtures is more than $2 million, irrespective of the portion transferred. There is phasing in up to $3 million, where at $3 million full duty is payable.

What to do now?

  • If you are a developer and have a pending development agreement, you need to enter into it before the Act comes into effect. If you are too late, you will need to re-think the structure and consider whether a development agreement is appropriate given the stamp duty consequences.


It is important to obtain legal advice from our Property and Commercial team if you are thinking of entering into a particular structure or undertake a development. Feel free to contact Phillip Leaman or a member of our expert team today.


The material contained in this publication is meant to be informational only and is not to be construed as legal advice. Tisher Liner FC Law will not be held liable or responsible for any claim, which is made as a result of any person relying upon the information contained in this publication.

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