By Seamus Lowe

18 March 2022

So you’ve purchased a property in your name. But now you want to add a second purchaser or maybe even a new purchaser to take over the transaction. That should be no problem, right? You even wrote the words ‘and/or nominee’ after your name, because you thought this might happen. But there may be implications arising from your nomination that you hadn’t considered yet.

Some of the questions which you will need to answer when, or even before, you nominate a new purchaser are:

How is GST being dealt with under the Contract – is the Margin Scheme applicable, or is the sale GST-free as the sale of a Going Concern?

If either of these applies to your purchase, then it was agreed between the Vendor and Purchaser at the time the Contract was signed that the Margin Scheme will apply or that the Going Concern provisions will apply to keep the transaction GST-free. In order for either of these to be applicable in a sale, there must be an agreement in writing that the relevant provisions will apply to the sale.

If you are adding a new party to the equation, they haven’t made that same agreement in writing that was made between the Vendor and Purchaser when the Contract was signed.
The Vendor and Nominee will have to agree in writing that the sale is a going concern or that the Margin Scheme provisions will apply.


If you are nominating a trust, who are the beneficiaries?

Perhaps you have thought about your purchase and decided that the best way to hold your new property will be in the name of your trust.

You may not be a foreign person but if you are nominating a discretionary trust to take over the purchase, the State Revenue Office (SRO) may consider the trust to be foreign if any of the eligible beneficiaries, whether named as a beneficiary or just simply within an eligible class, is a foreign person.

If the trust is classed as a foreign trust as a result of the above, then the SRO will consider the nominee to be a foreign purchaser.

If you are considered a foreign purchaser, you may be required to pay additional stamp duty, on top of the initial stamp duty, on a purchase of residential land or a purchase of non-residential land with the intention of turning it into residential land.


Have you taken any steps that might be considered land development?

You’ve purchased a block of land, and while you were waiting for settlement, engaged a surveyor to attend the property and prepare a survey, so that after settlement they can get straight to work on preparing the plan of subdivision as soon as possible.

In the above scenario, the SRO may consider that land development has taken place before the nomination.

The SRO considers actions that fall under any of the below six limbs to be land development:

  1. Preparing a plan of subdivision of the land or taking any steps to have a plan registered under the Subdivision Act 1988.
  2. Applying for or obtaining a permit under the Planning and Environment Act 1987 in relation to the use or development of the land.
  3. Requesting under the Planning and Environment Act 1987 a planning authority to prepare an amendment to a planning scheme that would affect the land.
  4. Applying for or obtaining a permit or approval under the Building Act 1993 in relation to the land.
  5. Doing anything in relation to the land for which a permit or approval referred to in paragraph (d) would be required.
  6. Developing or changing the land in any other way that would lead to the enhancement of its value.

In September 2021, the SRO issued a ruling that expanded even further on the above 6 limbs, including clarifying what it means to take any steps to have a plan registered. Under this ruling even the act of having a surveyor prepare a survey or report may be considered land development.

Land development occurring between the signing of the Contract and nominating your new purchaser may mean the SRO classifies the nomination as a sub-sale and both the original purchaser and the nominated purchaser may have to pay stamp duty.


If you are intending to nominate a substitute or additional purchaser, consider the implications on the existing Contract, the timing of your nomination, and the entity you are nominating.

These are just some of the unexpected nuances that you might face when purchasing. If you have any questions or need assistance with the purchase or sale of your property, then please reach out to our property team.

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