Danaher Moulton has just received a $600K duty exemption for a property developer client on a very complicated syndicated property development.
Our client, a very large property developer, had entered into a syndicated property development the facts of which were substantially as follows:
- A Corporate Trustee owned the property on Trust for a Joint Venture of 12 investors.
- Each of the investors had contributed funds with the intention that each would take a unit as part of the development.
The key outcome was to ensure that each of the investors take a unit without paying duty. The “off the plan” duty concession is no longer available to investors and there is no duty exemption on the transfer of property in lieu of shares held in the corporate trustee.
The complicating factor in such arrangements is that it is very difficult to “collapse” the bare trust and transfer the property into the names of the Joint Venture Parties. Section 35 of the Duties Act (bare trust provisions) is very difficult and has limited application in syndicated property developments such as this one. We provided an explanation of the complex Joint Venture provisions and the payment and application of funds by the venturers in written submissions during several respectful discussions with SRO staff, in order to establish that the requirements of the exemption had been met.
We were able to rely upon an often unknown and unused provision of the Duties Act, which combined with S27 of the Duties Act (partition provision), gave us (and the client) the desired outcome.
This is a significant Duty exemption win for the client which we were proud to advise on and implement. Liz Linedale, Peter Saunders and Dennis Danaher were all involved in the application.
If you have any duty issues, please feel free to call us on 1300 363314
