New exemption guidelines for Absentee Owner Surcharge and Foreign Purchaser Additional Duty

Published on 10 January 2018

The Victorian Treasurer has published new exemption guidelines for the Absentee Owner Surcharge and Foreign Purchaser Additional Duty.

The guidelines were updated following a scheduled review of their operation and now contain more guidance in relation to determining whether or not an exemption should be granted.

• The new Absentee Owner Surcharge guidelines apply from the 2018 land tax year.
• The new Foreign Purchaser Additional Duty guidelines apply to all dutiable transactions and relevant acquisitions occurring on or after 5 January 2018.

New exemption from the Absentee Owner Surcharge for absentee trusts

The Absentee Owner Surcharge guidelines also now sets out the relevant factors that need to be considered in determining whether an exemption should be granted in respect of an absentee trust. This discretionary power was recently introduced into the Land Tax Act 2005 by the State Taxation Acts Further Amendment Act 2017. 

An absentee beneficiary in relation to an absentee trust may, in some circumstances, be eligible for an exemption.

The effect of the exemption is that the absentee beneficiary is taken to be a beneficiary who is not an absentee beneficiary.

If an exemption has been granted to all of the absentee beneficiaries, then the trust is not an absentee trust.