July 27, 2022|
|The Victorian State Revenue Office announced that as of 1 July 2022 Late Settlement Interest (LSI)where it is $5k or more and the contract was entered into after 1 July 2022 be subject to stamp duty where it arises from a delayed settlement.|
In Victoria, penalty interest is 2% pa above the interest pursuant to the Penalty Interest Rates Act (Vic) 1983 (currently at a rate of 10%) although some contracts apply a higher rate. The SRO state that from 1 July 2022, for 12-month period you may need to re-lodge for reassessment if the LSI is $5,000.00 or more. At present, transactions that incur additional consideration resulting in Late Settlement Interest of less than $5,000.00 do not need to be re-lodged for reassessment.
The SRO confirm in this 12 month period, LSI will not be part of the dutiable value ( as the concessions are based on the purchase price being below a certain amount in determining eligibility for concessions and exemptions for: Principal place of residence concession; First home buyer duty exemption, concession or reduction; Off-the-plan concession; Pensioner concession; Young farmer exemption or concession; and First Home Owner Grant. You can still settle a transaction on the duty calculation without the LSI but then you must notify the SRO within 30 days of settlement by re-lodging for reassessment and if you fail to do so the SRO may charge penalties.
For more information, contact our property team on 9510 9888