Exception from aggregation for domestic builders

Preamble

1. The Duties Act 2000 (the Act) charges duty on dutiable transactions, such as transfers of land. Because duty is calculated at progressive rates, the total duty payable on 2 or more dutiable transactions may differ depending on whether the transactions are assessed separately or together.
    
2. Section 24(1) of the Act provides that dutiable transactions relating to separate items or separate parts of dutiable property are to be aggregated and treated as a single dutiable transaction where the contracts of sale are entered into within 12 months and the dutiable transactions together form, evidence, give effect to or arise from what is, substantially, one arrangement. Revenue Ruling DA-026v3 provides guidance on how and when dutiable transactions are aggregated under section 24(1) of the Act.
    
3. Section 24(2) of the Act provides an exception from aggregation for registered domestic builders (the Domestic Builder Exception). Under section 24(2), dutiable transactions are not aggregated if the Commissioner of State Revenue (the Commissioner) is satisfied that:
    
   1. the dutiable property the subject of the dutiable transactions is vacant land;
   2. the transferee is registered as a ‘domestic builder’ under the Building Act 1993 (the Building Act) and is a ‘builder’ within the meaning of the Domestic Building Contracts Act 1995 (the Domestic Building Act); and
   3. the transferee intends to construct residential premises on the vacant land for the purpose of selling that land to the public.
       
4. If the transferee does not construct residential premises on the vacant land, the Commissioner may reassess the dutiable transactions that were not aggregated due to the Domestic Builder Exception (section 24A).
    
5. This Ruling clarifies the application of the Domestic Builder Exception, with particular emphasis on who must be registered as a domestic builder for the purposes of section 24(2)(b). It also explains how and when transactions will be reassessed under section 24A.

Ruling

Vacant land

6. Section 24(2)(a) requires the Commissioner to be satisfied that the dutiable property the subject of the dutiable transaction is ‘vacant land’. The term vacant land is not defined in the Act. In its ordinary meaning, ‘vacant’ means ‘having no contents; empty; void’: Macquarie Dictionary. In the context of section 24(2), this means the land must be empty of buildings or structures, not merely unoccupied.
    
7. Section 24(7) provides that the Commissioner may treat land as vacant if satisfied that it is substantially vacant apart from there being the remnant of any building, or other object or structure, that has been preserved because of its heritage significance. 

Who must be registered as a domestic builder

8. Section 24(2)(b) requires the Commissioner to be satisfied that the transferee is registered as a domestic builder under the Building Act and is a builder under the Domestic Building Act. Where there is more than one transferee, each transferee must satisfy both requirements.

Registration under the Building Act

9. Under the Building Act, only an individual or a company may be registered as a domestic builder. The transferee itself must be registered as a domestic builder under the Building Act at the time the dutiable transaction occurs. It is not relevant that another person or entity associated with the transferee is registered. This means:
    

   • Where the transferee is a company: that company must itself be registered. Registration held by the company’s directors, shareholders, officers, or another associated person does not satisfy this requirement.

   • Where the transferee is an individual: that individual must be personally registered. Registration held by a company of which the individual is a director, shareholder or officer does not satisfy this requirement.

10. Unlike the situation described in paragraph 9, where an individual or company is registered as a domestic builder under the Building Act and acquires land as trustee of a trust, the Commissioner will generally be satisfied that the individual or company is registered as a domestic builder for the purposes of section 24(2)(b).

Builder under the Domestic Building Act

11. Section 24(2)(b) also requires the Commissioner to be satisfied that the transferee is a builder within the meaning of the Domestic Building Act. A builder is relevantly defined in the Domestic Building Act to mean a person who carries out, or intends to carry out, ‘domestic building work’. Domestic building work is defined to include the erection or construction of a home and associated works.
     
12. The Commissioner will be satisfied that a transferee is a builder under the Domestic Building Act where the transferee is registered as a domestic builder under the Building Act and intends to construct residential premises on the vacant land.

Intention to construct and sell residential premises to the public

13. Section 24(2)(c) requires the Commissioner to be satisfied that the transferee intends to construct residential premises on the vacant land for the purpose of selling that land to the public. In assessing this intention, the Commissioner may have regard to matters such as planning and building approvals, business records, project documentation, and the transferee’s history of similar developments.
     
14. The intention to construct residential premises for sale to the public must exist at the time the dutiable transaction occurs and must apply to each parcel of vacant land acquired.
     

    • Where multiple parcels of land are acquired but only some are intended for residential construction and sale to the public, the Domestic Builder Exception only applies to the parcels intended for residential construction and sale to the public.

    • The Commissioner will not be satisfied that section 24(2)(c) is met where, at the time the dutiable transaction occurs, the transferee has not formed an intention to construct residential premises for sale to the public. This includes where the transferee intends to use or retain the land for a different purpose, such as private use or rental purposes.

Reassessment of duty where residential premises are not constructed

15. Where dutiable transactions were not aggregated because of the Domestic Builder Exception and residential premises are not constructed on the land as intended, section 24A provides that those dutiable transactions are chargeable with duty. The Commissioner may reassess those transactions by aggregating them under section 24(1) and recalculating duty on their combined dutiable value, if any of the following triggering circumstances occur.

16. The transferee must notify the Commissioner in writing within 30 days after becoming aware that any of the triggering circumstances have occurred (section 24A(6)). A failure to notify the Commissioner does not prevent the Commissioner from reassessing duty under section 24A (section 24A(7)).

How duty is recalculated

17. If any of the triggering circumstances described in the table in paragraph 15 occur, duty is recalculated on the original dutiable transactions using the following methodology (section 24A(3)):
     

    • Step 1: Aggregate all the dutiable transactions that would have been aggregated but for the Domestic Builder Exception, using the dutiable value of each dutiable transaction at the time it occurred.

    • Step 2: Calculate duty on the aggregated dutiable value.

    • Step 3: Apportion the duty calculated under Step 2 to each dutiable transaction in proportion to its dutiable value relative to the total aggregated dutiable value.

    • Step 4: For each dutiable transaction that is chargeable with duty as a result of a triggering circumstance described in paragraph 15: the duty payable is the amount apportioned to that transaction under Step 3 less any duty already paid on of the transaction.

Date of effect

18. When finalised, this ruling applies to dutiable transactions arising from contract of sale entered into on or after 1 June 2026, and to dutiable transactions that occur on or after 1 June 2026. This ruling does not apply to dutiable transactions that occur on or after 1 June 2026 where the relevant contract of sale was entered into before 1 June 2026.

Disclaimer

Rulings do not have the force of law. Each decision made by the State Revenue Office is made on the merits of each individual case having regard to any relevant ruling. All rulings must be read subject to Revenue Ruling GEN-001.

This is a draft ruling only, and is not available for publication, nor may it be relied upon by taxation officers, taxpayers or practitioners.