When does liability to pay landholder duty arise?

A liability for landholder duty arises when you make a ‘relevant acquisition’.

A relevant acquisition occurs when you acquire an interest that:

• is a 'significant interest'
• when aggregated with other interests held by you or an associated person amounts to a significant interest
• is a significant interest, and a further interest is acquired
• when all interests that are essentially one arrangement between multiple acquirers are aggregated, form a significant interest.

A significant interest means, in the event of a distribution of all the property of the landholder immediately after the interest was acquired, you are entitled to:

For acquisitions made on or after 1 February 2024

• 50 per cent or more of the property in a 'private landholder', or
• 20 per cent or more of the property in private unit trust schemes other than registered wholesale unit trust or imminent wholesale unit trust schemes, or
• 90 per cent or more of the property in a 'public landholder'

For acquisitions made prior to 1 February 2024

• 50 per cent or more of the property in a ‘private landholder, or
• 90 per cent or more of the property in a ‘public landholder’

Acquiring a significant interest does not have to occur in one event. For instance, if you already hold a 45 per cent interest in a landholder that is a private company and then acquire another five per cent, you may be liable to pay landholder duty.

Registration of wholesale unit trust schemes by the Chief Commissioner

For acquisitions made on or after 1 February 2024, the higher 50% threshold will apply to an acquisition in a wholesale unit trust or imminent wholesale unit trust scheme that has been registered by the Chief Commissioner under section 157AD of the Duties Act 1997.

More information can be found on the Wholesale and Imminent Wholesale Unit Trusts webpage.

Who is liable to pay landholder duty?

The following persons are jointly and severally liable to pay landholder duty:

1. The person who makes the relevant acquisition
2. The landholder or the trustee of the landholder
3. If the acquisition results from an aggregation of the interests, each of those other persons

Any liability to pay duty, interest or penalty tax is a charge on the land holdings of the landholder or trustee.

Where an interest in a landholder is acquired or held by a bare trustee for another person, the interest is taken to have been acquired by the ultimate beneficial owner.

The ultimate beneficial owner must pay the duty on a relevant acquisition made as a result of combining all interests held by the ultimate beneficial owner or associated person.