Business buyers beware: Victorian Government moves to close stamp duty loophole

Posted: 13/03/2009 The Duties (Amendment) Bill 2008 (Vic) (“the Bill”), currently before Parliament, goes far beyond its stated aim of closing the "long-term lease loophole".  Under the Bill, a transfer or assignment of lease (pursuant to a business sale agreement) may be a dutiable transaction where: * the business purchase price is partially referable to the lease transfer or assignment * the lease is in respect of the premises from which the business operates.  Even if the lease is transferred or assigned for $1.00, the dutiable value may equate to the value of the leased land – a very harsh result for the new owner of the business.  The Bill is also proposed to operate retrospectively (to apply to transactions after 21 November 2008). That means that a buyer who didn't budget for the stamp duty liability in respect of the transfer or assignment of lease for a business purchased since 21 November 2008 could be caught short. In the current economic climate, that could present real difficulties for the buyer. If you may be affected by the changes proposed in the Bill, please contact us. * This news item is for general information purposes only. This news item is not, and must not be relied upon as, legal advice.