Page 2547 - Week 07 - Thursday, 18 June 2009
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
process, we have been advised that long-term residential lease exemptions, for example for retirement homes, were not included. This 2009 bill will now realign the Duties Act with existing policy. This oversight needs to be corrected, and we support that.
The second change to the act in relation to the declaration of trust landholder duty amendments will enable the ACT to follow New South Wales and Victoria, which made similar amendments in 2008 and 2007, in closing a loophole in the act which enabled landholders to avoid paying duty by declaring a trust. This will promote taxation equity between indirect acquisitions of interests in and direct purchases of interests in land. Again this seems a fairly straightforward amendment and one which may increase revenue for the territory.
The third amendment, in relation to landholder duty top-hatting exemptions, will make ACT property trusts more competitive in domestic and international markets by bringing the ACT into line with other jurisdictions. The top-hatting arrangement enables the creation of a head trust over other trusts and companies in the group, which will correct a taxation inequity because of the potential for double duty to occur as a result of the top-hatting arrangement.
As no change of ownership of interests in the property trust occurs when top-hatting is implemented, it is inequitable to charge duty when the ownership interests have not changed. The safeguard in this system is that the reorganisation or top-hatting must qualify as a rollover scheme under subdivision 124-Q of the commonwealth act, the Income Tax Assessment Act 1997.
The amendments in relation to the top-hatting exemption have been modelled on corresponding provisions in New South Wales and Victoria which have been in place since 1997 and 2000. This change seems fair and reasonable, with an appropriate safeguard in place in order to ensure compliance.
Our advice is that the bill is expected to be revenue neutral, will streamline the act as it exists at present and will bring the ACT into line with other jurisdictions. Therefore we have no objection to the bill being passed in the Assembly.
MS GALLAGHER (Molonglo—Treasurer, Minister for Health, Minister for Community Services and Minister for Women) (10.42), in reply: I thank members for their contributions this morning. The Duties Amendment Bill 2009 makes three separate amendments to the Duties Act 1999. Firstly, it ensures that the exemption for long-term residential leases will be retained when duty on short-term leases is abolished on 1 July 2009. Secondly, it clarifies that a declaration of trust is a means of acquiring an interest in a landholder for the purposes of landholder duty. Thirdly, it introduces an exemption from landholder duty for top-hatting property trust restructures.
The long-term lease amendments are necessary to fix an existing problem in the Duties Act. The problem exists due to the previous amendments that implemented the abolition of commercial lease duty in 2006. The previous amendments moved the long-term lease provisions in the Duties Act. However, the exemption for residential
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .