Understanding economic entitlements

Arrangements that may attract land transfer duty.

Key information

An economic entitlement is a type of arrangement relating to land.

If a person obtains an economic entitlement in relation to land, the law treats this as an acquisition of beneficial ownership of the land. The entitlement may arise directly or through another person.

Land transfer duty may apply to that acquisition if the land has an unencumbered value of more than $1 million.

An economic entitlement includes an entitlement to:

participate in the income, rents or profits derived from the land
participate in the capital growth of the land
participate in the proceeds of sale of the land
receive an amount determined by reference to any of the above matters
acquire any of these entitlements.

The economic entitlement provisions are in Part 4B of Chapter 2 of the Duties Act 2000 (the Duties Act). Separate provisions apply to relevant acquisitions of an economic entitlement in relation to private landholders.

Arrangements relating to economic entitlements

Whether an arrangement relating to land gives rise to an economic entitlement is determined by the legal effect of the arrangement, rather than the way it is described or structured. The economic entitlement provisions can apply to some arrangements involving companies or unit trust schemes, even where landholder duty does not apply.

For guidance on key concepts, including the meaning and scope of an arrangement, see Revenue Ruling DA‑067.

For guidance on arrangements that involve fees for service, including certain retirement village arrangements, see Revenue Ruling DA‑065.

Deeming provisions and discretion

You are deemed to have acquired 100% of the beneficial ownership of the land if the arrangement under which the economic entitlement is acquired:

does not specify the percentage of the economic entitlement acquired
specifies the percentage of the economic entitlement acquired and also includes another entitlement of, or amount payable to, you or an associated person, or
entitles you or an associated person to more than one type of economic entitlement.

We may determine that a lesser percentage has been acquired if it is appropriate in the circumstances.

For guidance on determining the percentage of beneficial ownership acquired, including the exercise of the Commissioner’s discretion, see Revenue Ruling DA-066.

Rates and calculations

Land transfer duty is calculated on the value of the beneficial ownership of land taken to be acquired.

Where an arrangement specifies a percentage of an economic entitlement, duty is calculated on the value of that proportion of the land. Where the law deems a 100% acquisition of beneficial ownership, duty is calculated on the full value of the land.

Refer to the current land transfer duty rates and foreign purchaser additional duty rates.

Exemptions and concessions

Several exemptions, concessions and reductions apply to the beneficial ownership of land taken to be acquired under the economic entitlement provisions. These include:

the exemptions and concessions that apply to dutiable transactions under Part 5 of Chapter 2 of the Duties Act
the exemptions and concessions for corporate reconstructions under Part 2 of Chapter 11 of the Duties Act
reductions under section 32XI of the Duties Act, which may apply where land is transferred to a person who held an economic entitlement in relation to the land.

Lodge and pay

If you acquire an economic entitlement and a duty liability arises, you must lodge the acquisition with us and pay the duty.

When lodging, you may need to provide documents that support the assessment, including:

contracts and agreements relating to the arrangement
a valuation of the land showing the unencumbered value at the time the economic entitlement is acquired.

If you are requesting the Commissioner determine a lesser percentage than 100% as part of your lodgement, you may also need to provide:

submissions setting out the appropriate percentage
calculations and supporting information.

For more information about lodging and paying duty, see the:

Duty must be paid within 30 days after the liability arises. Penalty tax and interest may apply if duty is not paid within this timeframe.

Private rulings

You may request a private ruling where the acquisition has not completed and:

it is unclear whether the acquisition gives rise to an economic entitlement, or
you are requesting the Commissioner determine a lesser percentage than 100%.

Updated: 13 May 2026