24ADutiable transactions relating to vacant land and construction of residential premises—where not constructed

24A Dutiable transactions relating to vacant land and construction of residential premises—where not constructed (1) Dutiable transactions in respect of vacant land that would have been aggregated under section 24(1) but were not aggregated because of section 24(2) are chargeable with duty in accordance with this section if any of the following occurs in respect of the land— (a) another dutiable transaction occurs in respect of the vacant land and at the time that the other dutiable transaction occurs no residential premises that are ready for occupation as a place of residence have been constructed on the land by the transferee; (b) premises other than residential premises have been constructed on the vacant land and those premises are ready for occupation or use for the purposes for which they were constructed; (c) the transferee has not constructed residential premises on the vacant land that are ready for occupation as a place of residence within 5 years after the date on which the land was transferred to the transferee. (2) If duty is chargeable under subsection (1), the Commissioner may reassess duty on the transactions. (3) The duty chargeable under this section is calculated as follows— (a) firstly, aggregate the dutiable transactions that would have been aggregated under section 24(1) but were not aggregated because of section 24(2), as if the dutiable value of each dutiable transaction is the same as it was at the time of the dutiable transaction; and (b) secondly, calculate the duty that would be payable on the dutiable value of the aggregated dutiable property; and (c) thirdly, apportion the amount of duty that would be payable on the aggregated dutiable property to each dutiable transaction that would have been aggregated but was not; and (d) the amount of duty payable for each dutiable transaction that is chargeable with duty under subsection (1) is the amount apportioned to it under paragraph (c), less an allowance for any duty already paid in respect of that transaction. On 1 September 2012, a builder acquires 10 lots of vacant land by completing 10 dutiable transactions. The value of each dutiable transaction is $100 000. The transactions would have been aggregated under section 24(1) and duty would have been calculated on an aggregated amount of $1 000 000. However, the builder intends to construct residential premises on each lot of vacant land. Section 24(2) applies and the transactions are not aggregated and duty is calculated on each transaction separately. On 1 September 2015, the builder on-sells two of the lots without building residential premises on them. Duty is calculated in the following way. The 10 dutiable transactions are aggregated based on the dutiable value of the dutiable transactions at the time they occurred (10 lots x $100 000 = $1 000 000). The duty that would be payable on the dutiable value of the aggregated property is then apportioned to each dutiable transaction. The builder is re‑assessed for duty in respect of each lot the builder on‑sold, less an allowance for each lot for the duty previously paid on it. The builder must pay the difference in respect of each on-sold lot. (4) A liability for duty charged under this section arises— (a) in the case of subsection (1)(a)—when the other dutiable transaction occurs; (b) in the case of subsection (1)(b)—when the premises are ready for occupation or use for the purposes for which they were constructed; (c) in the case of subsection (1)(c)—5 years after the date on which the land was transferred to the transferee. (5) A reassessment referred to in subsection (2) is authorised if more than 5 years have passed since the initial assessment was made. Section 9(3) of the **Taxation Administration Act 1997** allows a reassessment to be made more than 5 years after the initial assessment if this is authorised by a taxation law. (6) If dutiable transactions would have been aggregated under section 24(1) but were not aggregated because of the operation of section 24(2), the transferee must lodge written notice with the Commissioner within 30 days after becoming aware that any of the circumstances set out in subsection (1) have occurred in respect of any of those transactions. (7) A failure of a transferee to comply with subsection (6) does not affect the Commissioner's power to reassess duty under this section.