If you buy, are transferred Growth Areas Infrastructure Contribution (GAIC) affected land or make a significant acquisition in a landholder of affected land, you may elect to defer payment of the GAIC in respect of this event. To do this, you must lodge your application form within three months of the event taking place.
For a significant acquisition in a landholder, an election to defer will be taken to have been made by all those who are jointly and severally liable for the GAIC payment for that acquisition.
How a deferral works
Both the transfer of GAIC affected land and a significant acquisition in a landholder of affected land are dutiable transactions.
If you are liable to pay the GAIC on a dutiable transaction, you may be able to defer paying all or part of the triggered GAIC liability.
How much and whether the deferred amount is subject to indexation and/or interest depends on the type of land involved (Type A, B-1, B-2 or C), whether it is part of a Precinct Structure Plan (PSP) and the date of the transaction. More details can be found at GAIC deferral, thresholds, indexation and interest.
A deferred GAIC liability, including indexation and/or interest, becomes due when the next GAIC event takes place, which is the first of the following:
- Subsequent dutiable transaction relating to land,
- Issuing of a statement of compliance for subdivision, or
- Making of a building permit application.
A GAIC liability, including any indexation and interest, can continue to be deferred and the liability rolled over until the next GAIC event whenever there is a subsequent dutiable transaction relating to land.
However, once a statement of compliance for a subdivision has been issued or a building permit application has been made, the deferred GAIC liability, including indexation and interest, must be paid. Alternatively, prior to the event taking place, the liable person may apply to pay the GAIC in stages.
If you are liable to pay GAIC, you may elect to defer payment by lodging an application form within three months of the dutiable transaction.
The election to defer will take effect from the time the liability arises until the next GAIC event occurs, or the deferred GAIC, including any indexation and interest, is paid.
Deferred GAIC and subsequent transferees
When a subsequent dutiable transaction occurs in relation to the land prior to the land being subdivided or developed, your liability to pay the deferred GAIC is extinguished.
The deferred GAIC liability together with any indexation and interest (roll-over GAIC), rolls over to the subsequent transferee/s, being:
- The transferee in the case of a land transfer,
- The subsequent purchaser registered on title in the case of a sub-sale, or
- All the acquirers (and landholder) in the case of a significant acquisition.
If the subsequent dutiable transaction occurs in relation to less than the whole of the interest in the land or in a landholder that owns the land:
- The roll-over liability of the subsequent transferee will be proportionate to that interest, and
- The relevant person remains liable to pay or defer the remaining part of the deferred GAIC.
Note: Although you may have been excused from paying the GAIC on account of a GAIC exemption or an excluded event, it does not stop the GAIC from applying to the land. A subsequent transferee will be liable to pay the deferred GAIC unless an appropriate exemption or excluded event applies.
Due date of deferred GAIC
The GAIC is due within three months of the dutiable transaction. A subsequent transferee becomes liable to pay the roll-over GAIC from the time the subsequent dutiable transaction occurs.
To avoid a tax default, they must pay, defer their liability or apply for staged payment approval within three months of this date.
Subsequent transferees deferring GAIC
The subsequent transferee may elect to defer paying the roll-over GAIC by lodging a completed application form within three months of the subsequent dutiable transaction.
The subsequent transferee’s election to defer will take effect from the time the subsequent transferee’s liability arises, that is the date of the subsequent dutiable transaction.
The GAIC may be deferred and rolled over following each subsequent dutiable transaction. There is no limit to the number of time this can happen. However, the roll-over GAIC continues to be subject to any indexation and/or interest, through all succeeding subsequent dutiable transactions relating to the land.
Subdivision or building works
The GAIC deferral ends and the liability including any indexation and/or interest must be paid on or before the first of the following events, unless it is an excluded event:
- The issuing of a statement of compliance relating to all or any part of the land, or
- The making of a building permit application relating to all or any part of the land.
If the interest in the GAIC affected land is held via a significant interest in a landholder, the liable person must pay the roll-over GAIC plus any indexation and/or accrued interest on or before the first of the following events:
- The issuing of a statement of compliance relating to all or any part of the land held by the landholder, or
- The making of a building permit application relating to all or any part of the land held by the landholder.
Alternatively, prior to this the liable person may apply for staged payment approval to pay the GAIC in stages. Once granted, the GAIC will need to be paid in accordance with that arrangement.
Note: If an exempt or excluded GAIC event takes place, the deferred liability is not extinguished but remains attached to the land. In the event of an excluded subdivision, the liability will be attached to the child lot(s) in proportion to their area and with respect to a building permit application, the liability remains attached to the land as it is remains constituted.
Default on deferred GAIC
A failure to pay the deferred or roll-over GAIC and any accrued interest by the due date constitutes a tax default under the Taxation Administration Act 1997 (TAA).
The deferred GAIC will then become immediately payable as if the election of a deferral or a subsequent deferral had never been made. The person will be liable to pay interest and penalty tax, if any, under the TAA.
In the case of a subsequent deferral, interest and penalty tax will apply to the amount of the roll-over GAIC for which the subsequent transferee becomes liable.
Deferred GAIC becomes a charge on land
Deferred GAIC, including roll-over GAIC, and any applicable interest that is not paid by the due date is a charge on the land in respect of which the GAIC is imposed and the Commissioner may register that charge.
This charge will only be removed when the outstanding amount is fully paid, or the liability to pay the GAIC in respect of the GAIC event is extinguished.
Land ceasing to be in a contribution area
If land, which has a deferred or roll-over GAIC liability attached to it, ceases to be in the contribution area within three years after the GAIC liability arose from the first dutiable transaction relating to the land, the liability is extinguished to the extent that it relates to land that has ceased to be in the contribution area.
If a person has paid any non-deferred amount of the GAIC in respect of land that ceases to be in the contribution area, the person may apply for a refund of the GAIC paid under the TAA.