Changes to assumed tax amounts in duty transactions

Key information

An assumed tax amount is an amount a purchaser must pay for or towards a vendor's tax liability under a contract of sale.

If an assumed tax amount forms part of the consideration for the acquisition of a property, duty is payable on that amount, and you must include it when lodging the duty transaction.

Most property sales do not involve assumed tax amounts. For detailed guidance on when assumed tax amounts form part of the consideration for an acquisition, see Revenue Ruling DA-070.

If an assumed tax amount changes after a duty transaction is lodged, you may need to update the transaction or tell us about the change.

Changes to an assumed tax amount may affect the duty payable. What you need to do depends on the type of transaction, whether we have assessed the transaction and when settlement is due.

Lodging assumed tax amounts in Duties Online

When you lodge a duty transaction in Duties Online, include all assumed tax amounts that form part of the consideration for the acquisition. Enter each assumed tax amount separately when prompted.

If an assumed tax amount is not known, include a reasonable estimate based on the method in the contract of sale and the latest information available when you lodge.

Changes to assumed tax amounts after lodgement

After lodgement, you may become aware that the assumed tax amount recorded in Duties Online differs from the amount payable under the contract of sale.

For example:  

• a settlement delay may reduce an assumed tax amount if the contract of sale requires the purchaser to pay the vendor’s land tax attributable to the period after settlement
• an estimated assumed tax amount recorded at lodgement may differ from the final amount calculated under the contract of sale.

If the amounts differ, the consideration for the transaction and the duty payable may also differ.

What you need to do depends on whether the transaction is a standard transaction or a complex transaction that requires manual review. Learn more about standard and complex duty transactions.

Standard transactions

For a standard transaction lodged in Duties Online, update the Digital Duties Form and the transaction with the revised assumed tax amount. If the transaction has already been certified, recertify it before settlement.

Complex transactions

For a complex transaction that has been submitted to us for manual review, email us the revised assumed tax amount as soon as possible. Do not cancel the transaction or create a new transaction unless we ask you to.

When you email us, include:

• your contact details
• the bundle or transaction ID
• the scheduled settlement date
• the assumed tax amount used in the duty assessment, or if duty has not yet been assessed, the amount recorded in Duties Online
• the revised or final assumed tax amount
• the reason for the difference. 

What happens next depends on whether we have assessed the transaction and how soon settlement is:

• If we have not assessed the transaction, we will consider the revised amount as part of the duty assessment.
• If we have assessed the transaction and you email us at least 14 days before settlement, we will consider the revised amount and update the assessment.
• If we have assessed the transaction and you email us less than 14 days before settlement, we may not be able to update the assessment before settlement. 

Unless we tell you otherwise, if we cannot update the assessment before settlement:

• proceed to settlement using the duty already assessed for the transaction
• after settlement, compare the final assumed tax amount payable under the contract of sale with the amount used in the duty assessment. 

If the final assumed tax amount is lower than the amount used in the duty assessment, the purchaser may apply for a refund of any overpaid duty.

If the final assumed tax amount is higher than the amount used in the duty assessment, email us within 30 days after settlement. We can then reassess the duty payable.

If you do not email us within 30 days after settlement, interest and penalty tax may apply. The purchaser is liable for any additional duty, interest and penalty tax.

Late settlement interest

A settlement delay may change an assumed tax amount and result in late settlement interest. This may affect the consideration for the transaction and the duty payable.

We use the final assumed tax amount and late settlement interest payable by the purchaser to work out the consideration and duty payable.

You must email us within 30 days after settlement if:

• the total consideration for the transaction is higher than the consideration used in the duty assessment, and
• the increase is due to a higher final assumed tax amount, late settlement interest of $5,000 or more, or both. 

A refund is only available if duty was overpaid after taking into account both the final assumed tax amount and any late settlement interest payable by the purchaser.