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Land tax Victoria – Absentee owner surcharge
The land tax surcharge where applicable to Victorian property increases from 1.5% to 2% with effect from 1 January 2020.
The By Lawyers Victorian Conveyancing publications, as well as the Trusts publication, have been updated accordingly.
By Lawyers wish everyone a happy holiday season.
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Land tax NSW – Increases to threshold values
Land tax thresholds are indexed to rise on 1 January each year.
The 2020 threshold combined land value will increase to $734,000 for all liable land. Special trusts and non-concessional companies are excepted.
A marginal tax rate of 1.6% of the aggregate taxable value above the tax-free threshold plus $100 applies.
If the aggregate taxable value exceeds the premium rate threshold of $4,488,000 then $60,164 is payable plus a marginal tax rate of 2% over that amount.
All relevant commentary and precedents in By Lawyers Conveyancing & Property Guides have been updated accordingly.
By Lawyers wish everyone a happy holiday season.
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Employment law – Paid parental leave amendments
The Paid Parental Leave Amendment (Work Test) Act 2019 has made the following changes to the ‘work test’ under the Paid Parental Leave Act 2010:
These amendments commence form 1 January 2020.
The By Lawyers Employment Law commentary has been updated accordingly.
By Lawyers wish everyone a happy and safe festive season.
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Where a foreign person acquires or holds residential property, duty and land tax surcharge can apply. Foreign person surcharge duty and land tax can also apply to testamentary discretionary trusts where foreign persons are beneficiaries or potential beneficiaries.
The NSW Commissioner of State Revenue issued a ruling in March 2017 allowing exemption of discretionary trusts from surcharge duty and land tax if the trust deed was amended to exclude foreign beneficiaries within six months of the exemption being granted.
The State Revenue Legislation Further Amendment Bill 2019 is currently before the NSW Parliament. If this Bill is passed, the ability to amend a trust deed to avoid the surcharge will be restricted. Once the Bill passes, the exemption is likely to be removed. The second reading speech for the Bill states: ‘the Government considers that the end of 2019 allows sufficient time for any remaining trustees and their advisers to make necessary changes to trust deeds’.
There is two-year period of grace, from the commencement of the proposed new s 104JA of the Duties Act 1997. During that period, the trustee of a testamentary discretionary trust will not be deemed a foreign person if the deceased was not a foreign person, even if the trust does not prevent a foreign person from being a beneficiary of the trust.
In order to avoid the application of surcharge duty and land tax, the By Lawyers wills creating testamentary discretionary trusts and library of testamentary discretionary trust provisions include a clause titled ‘Foreign beneficiaries’ that prohibits the trustee from making trust distributions to, or otherwise benefiting, a foreign person. The clause must also prohibit an amendment that has the effect of including a beneficiary or potential beneficiary who is a foreign person. Where it is intended for a foreign person to benefit under a testamentary discretionary trust, this clause should be appropriately amended or removed when drafting the will.
It is important to review existing testamentary trust provisions arising under a will and consider whether it is necessary to amend to avoid the application of surcharge duty and land tax.
See the commentary in the Wills (NSW) Guide for further details.
by By Lawyers
Where a foreign person acquires or holds residential property, duty and land tax surcharge can apply. Foreign person surcharge duty and land tax can also apply to discretionary trusts where foreign persons are beneficiaries or potential beneficiaries.
The NSW Commissioner of State Revenue issued a ruling in March 2017 allowing exemption of discretionary trusts from surcharge duty and land tax if the trust deed was amended to exclude foreign beneficiaries within six months of the exemption being granted.
The State Revenue Legislation Further Amendment Bill 2019 is currently before the NSW Parliament. If this Bill is passed, the ability to amend a trust deed to avoid the surcharge will be restricted. Once the Bill passes, the exemption is likely to be removed. The second reading speech for the Bill states: ‘the Government considers that the end of 2019 allows sufficient time for any remaining trustees and their advisers to make necessary changes to trust deeds’.
It is therefore important for trustees to review existing discretionary trust deeds and consider whether they require amendment.
In order to avoid the application of surcharge duty and land tax, discretionary trust deeds must include a clause that prohibits the trustee from making trust distributions to, or otherwise benefiting a foreign person. The deed must also prohibit an amendment that has the effect of allowing the trustee to make distributions to, or to otherwise benefit, a foreign person.
The By Lawyers Discretionary Trust deed precedents and commentary have been amended accordingly. A note has also been added to the ‘Retainer Instructions – Trusts’ precedent, to prompt practitioners to raise this issue with clients when drafting trust deeds.
See the commentary in the By Lawyers Trusts Publication for further details.
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Recent amendments to domestic violence law have commenced in South Australia. They are contained within the Statutes Amendment (Domestic Violence) Act 2018.
The new s 26A of the Intervention Orders (Prevention of Abuse) Act 2009 enables an applicant to apply to the court to vary an interim order issued by police.
Where such an application is made the court must hold a preliminary hearing as soon as practicable and without summoning the respondent to appear. An application can be made by telephone or other electronic means, and the preliminary hearing may occur by oral questioning of the applicant and any other available witness, or by other means contemplated by the rules including affidavit evidence. If the court thinks it appropriate, it may adjourn the hearing so the applicant can attend for questioning.
At the preliminary hearing, the court may:
Any interim variation issued by the court must require the defendant to appear before the court within eight days.
An interim variation of an intervention order issued by the court comes into force against the defendant when:
Pursuant to the new s 13BB of the Evidence Act 1929 and the new s 28A of the Intervention Orders (Prevention of Abuse) Act 2009, the applicant, or someone else for whose protection an intervention order is sought, may give evidence via a recording. Section 28A applies in addition to, and does not derogate from, any other power of the court to receive evidence or to determine the form in which evidence may be received, including evidence in the form of a recording.
The new s 20A of the Criminal Law Consolidation Act 1935 introduces a specific domestic violence strangulation offence—namely, choking, suffocating or strangling a person without consent with whom the offender is, or was, in a relationship. The maximum penalty for the offence is seven years imprisonment.
These amendments to domestic violence law have been incorporated into the commentary in the By Lawyers Intervention Orders guide for South Australia.
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Significant changes to off the plan contracts commenced 1 December 2019.
The changes arise from the Conveyancing Legislation Amendment Act 2018 (NSW) and the Conveyancing (Sale of Land) Amendment Regulation 2019 (NSW). They place further disclosure obligations on vendors. They also create new remedies and stronger protections for purchasers when entering into residential off the plan contracts.
An off the plan contract is defined in the amending act to mean a contract for the sale of a residential lot that does not exist at the time the contract is entered into.
The following are not caught by the amendments:
By Lawyers are proud to assist subscribers to understand and comply with these amendments. Like all By Lawyers publications, our Conveyancing Guides provide all the necessary commentary and precedents in one place. Enjoy practice more!
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Wollert Epping Developments P/L v Batten [2019] VSC 618 (Wollert) is the first case on the topic for some years and the first to consider the current standard identity clause, being General Condition 3 of the LIV/REIV contract in use between 2008 and 2019 and General Condition 7 of the LIV/REIV contract that was adopted in August 2019. As was said in Wollert, quoting from a previous judgment by Brooking J, identity clauses:
“had long been common in Victoria in contracts of sale of land under the TLA… since at least the middle of the century”.
The function of the identity clause is to chart a course between the rights of the vendor who is able to deliver title to the land and the rights of a purchaser who complains that the title does not comply with the dimensions of the land as represented by the physical boundaries, typically the fences.
The common law took a strict view in relation to dimensions and any small discrepancy entitled the purchaser to avoid the contract. Equity sought to ameliorate this harsh outcome and introduced the alternative remedy of compensation for deficiency. The standard identity clause prior to 2008 adopted this compromise by denying the right to avoid but allowing the possibility of compensation. Since 2008 the standard identity clause has denied the right to avoid and also denied a right to compensation. As explained in Wollert, by reference to an article by myself, this was justified by the fact that modern conveyancing is conducted under the auspices of s.32 Sale of Land Act and a purchaser has full details of the vendor’s title before entering into the contract and consequently has the ability to undertake a comparison of the occupational boundaries as against the title dimensions before committing to the purchase.
Wollert concerned the sale of valuable development land on the outskirts of Melbourne. The vendors were long-time farmers and the purchaser was a subdivisional developer. After signing the contract, the purchaser discovered an encroachment on one boundary. The title dimensions showed the land to be 58.1 ha. and the encroachment was approximately 500sm. or 0.92% of the area. The purchaser argued that this constituted a breach of the warranties in General Condition 2.3(c)&(e) concerning possession of the land and passing unencumbered title at settlement, and General Condition 10(1)(b) requiring delivery of vacant possession. The vendor argued that GC.3 prevailed over those warranties and that the discrepancy did not give rise to a right to avoid or claim damages.
The first point to be considered was whether the property was sold by title or sold by description. The contract referred to both the title description and the land description and if the sale was by description (rather than title) there was no misdescription as the property at the address in the contract was capable of being delivered. Wollert settled this argument by deciding that the sale was by title, not description. The second question therefore was how did the warranty conditions interact with the identity condition.
After a consideration of the law relating to identity clauses generally, Derham AsJ. concluded that the identity clause (GC.3) prevailed over the warranty conditions in circumstances where the “difference in the measurements of the land as shown in the Certificate of Title compared with the land as occupied by the Vendors is not of such consequence that it may be reasonably supposed that but for the error or misdescription the purchaser would not have entered into the Contract.” His Honour had previously referred to “the common law principle – the so-called rule in Flight v Booth, to the effect that a significant discrepancy will justify avoidance of the contract by the purchaser, and the associated ‘rule of thumb’ that a 5% or greater diminution in area is likely to be considered significant.”
It is fair to say that this judgment has settled a long-standing uncertainty in relation to measurement disputes in Victoria and has come down on the side of the identity condition adopted by the standard contract of sale. Notwithstanding the rise of consumer protection and the demand for vendor disclosure, the purchaser still bears a due diligence obligation in relation to the basic compliance between title dimensions and occupational boundaries. Only a ‘significant’ discrepancy will entitle a purchaser to avoid the contract.
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Unlike a will, a power of attorney does not revoke a previous appointment of an attorney by the principal. Powers of attorney which are not intended to continue must be revoked.
The By Lawyers Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning Guide for NSW includes commentary on revoking a power of attorney, as well as a Revocation of Power of Attorney precedent.
Following some helpful feedback from our subscribers, the Revocation of Power of Attorney precedent has been amended for enhanced functioning.
The following amendments have been made:
This precedent can be found in the Revocation of Powers of Attorney sub-folder under Folder B. Powers of Attorney in the By Lawyers Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning Guide.
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The rules concerning the engagement or appointment of interpreters for civil litigation in NSW courts have been amended.
The Uniform Civil Procedure (Amendment No 92) Rule 2019 provides for new rules. These are based on the Model Rules in Recommended National Standards for Working with Interpreters in Courts and Tribunals prepared by the Judicial Council on Cultural Diversity.
The amendments that commenced on 8 November add Division 3 of Part 31 and Schedule 7A to the Uniform Civil Procedure Rules 2005 (NSW). The new division sets out rules which cover:
Importantly, an interpreter must now adhere to the Court Interpreters’ Code of Conduct, which is set out in Schedule 7A of the UCPR. A copy needs to be given to the interpreter as soon as possible after they have been engaged or appointed.
The By Lawyers Litigation publications for Local, District and Supreme Courts have been updated accordingly. A link to the Code of Conduct is included.