In Victoria stamp duty on leases was introduced as an anti-avoidance measure to impose duty on transactions that are effectively a sale transaction. In practice this legislation can apply in circumstances where the parties were not setting out to disguise a sale transaction as a lease, so certain arrangements should be avoided because stamp duty is assessed on the market value of a property. In particular, duty is assessed on the granting, surrender, transfer or assignment of a lease for which any ‘consideration’ other than ‘rent reserved’ is paid or agreed to be paid in respect of the lease (including subleases and concurrent leases).
GST is generally payable on rent and outgoings for commercial leases. Rent is typically assessable income. Capital gains tax may be assessable on any fee paid for an assignment of a lease or potentially a grant of lease (key-money).
Upon request we can, provide advice regarding stamp duty or assist you or your accountant with legal interpretation regarding duties or taxes. Contact us to find out how we can help.