Land holdings

Key information

A landholder’s land holdings include land and other property rights and interests it holds directly or is entitled to through other entities.

Definition of a land holding

A land holding is an interest in land and includes:

• fixtures that are held separately from the underlying freehold land on which the fixtures are located
• land taken to be beneficially owned due to an economic entitlement held in relation to the relevant land.

It does not include:

• the estate or interest of a mortgagee, chargee or other secured creditor 
• a profit a prendre.

Meaning of land

Land is not defined in the Duties Act 2000 (the Act). Based on the Interpretation of Legislation Act 1984 (Vic), land for the purposes of the Act includes land covered with water and any estate, interest, easement, servitude, privilege or right in or over land, such as a lease. 

Fixtures attached to the landholder’s land

For the purposes of Part 2 of Chapter 3 of the Act, land also includes anything fixed to land, even if the item:

• constitutes a fixture at law
• is owned separately from the land (such as tenant’s fixtures)
• is notionally severed or considered to be legally separate to the land under another Act or law.

An item can be fixed to land by virtue of a physical connection with the land. This usually requires more than the item merely resting on the land by its own weight.

An item resting by its own weight can still be a fixture under common law. These items will be treated as part of the land for landholder duty purposes.

Exclusion for certain items

Land does not include goods that are stock-in-trade, materials held for use in manufacture, goods under manufacture and goods held or used in connection with primary production.

The Commissioner also has discretion to determine that land does not include an item fixed to the land if the item is:

• owned by a person who is not the person who owns the land or an associated person of the person who owns the land, and 
• not used in connection with the land.

The Commissioner's discretion only applies to whether an item forms part of the land to which it is attached. It does not affect whether the item is treated as a separate land holding for the purposes of Chapter 3 of the Act.

The following examples show how the Commissioner may use this discretion.

Refer to sections 72 and 73 of the Act.

Ownership or entitlement to land holdings

A landholder can own or be entitled to land holdings by owning them directly or having someone hold them on its behalf. A landholder can also be deemed to own or to be otherwise entitled to land through:

• a linked entity
• a discretionary trust
• an uncompleted agreement.

Direct ownership or entitlement to land holdings

A landholder can own land holdings by owning them directly under section 72(2) of the Act. If a landholder is a private company or a listed company, its interest in the land must be a beneficial interest.

If the landholder is a private unit trust scheme, a wholesale unit trust scheme or a public unit trust scheme, the trustee of the scheme must hold the interest in the land in its capacity as trustee of the scheme.

This includes land held on behalf of a landholder by a bare trustee, nominee or custodian.

Indirect (constructive) ownership or entitlement to land holdings through linked entities

In addition to any land a company or unit trust scheme (including a landholder) may hold in its own right, it can be taken to hold land if it is entitled to it through a linked entity or chain or web of linked entities.

However, a company or unit trust scheme is not taken to be entitled to the land of linked entities unless it has an entitlement to at least 20% of the land on a winding up of all relevant linked entities.

A company or unit trust scheme is taken to be entitled to land through linked entities if, on the winding up of all linked entities and without regard to any liabilities, it would receive a distribution of any of the property held by those entities.

The interest in land is determined by the proportion of the property the company or unit trust scheme would be entitled to receive upon a winding up of all linked entities.

Where a company or unit trust scheme is taken to be entitled to at least 20% of the land through linked entities, the value of that interest is the equivalent proportion of the unencumbered value of the land. This is based on the proportion of the unencumbered value of the property to which it would be entitled on a winding up of all the linked entities, without regard to their liabilities.

For more information about constructive ownership of land holdings through linked entities, refer to:

• section 75 of the Act
• Revenue Ruling DA-058 – Constructive ownership of land holdings through linked entities (landholder provisions). 

Indirect (constructive) ownership or entitlement to land holdings through discretionary trusts

A company or unit trust scheme (including a landholder) or linked entity that is a beneficiary of a discretionary trust is taken to own or to be otherwise entitled to 100% of the land of the discretionary trust, even though at law it may not have a present entitlement to any part of such property.

However, to avoid unjust results, the Commissioner has discretion to determine that a company or unit trust scheme’s entitlement to the land of a discretionary trust is less than 100%.

For more information about constructive ownership of land holdings of discretionary trusts, refer to: 

• section 76 of the Act 
• Revenue Ruling DA-059 – Constructive ownership of land holdings of discretionary trusts (landholder provisions).

Deemed ownership or disposal of land or other property under uncompleted agreements

If a landholder or linked entity is a vendor or purchaser under an uncompleted agreement for the sale of land, it is taken to be entitled to the whole of the land.

An uncompleted agreement includes an arrangement involving both a put and call option over land.

A refund of duty may be available on the completion or rescission of that agreement.

Refer to sections 74 and 89I of the Act.