32OApplication of Division

32O Application of Division (a) the owner of the property (the ***vendor***) grants an option to, or is granted an option by, another person (the ***first purchaser***); and (b) any of the following persons (a ***subsequent purchaser***) obtains or assumes a transfer right in relation to the property*—* (i) a person other than the first purchaser; (ii) the first purchaser and a person other than the first purchaser; (iii) if there is more than one first purchaser, one or more of the first purchasers in different proportions from those specified in the option; and (c) a subsequent purchaser or an associate of a subsequent purchaser gives or agrees to give additional consideration in order for the subsequent purchaser to obtain or assume the transfer right; and (2) It is immaterial whether a subsequent purchaser obtains or assumes a transfer right— (a) by way of an assignment, nomination, novation, option, contract of sale or otherwise; and (3) Each assignment, nomination, novation, option, contract of sale or other arrangement by which a subsequent purchaser obtains or assumes a transfer right is called a ***subsequent transaction***. ***additional consideration*** for a transfer rightmeans any consideration given or agreed to be given by a subsequent purchaser or an associate of a subsequent purchaser in order for the subsequent purchaser to obtain or assume the transfer right, other than the following— (a) if the subsequent purchaser obtained or assumed the transfer right from the first purchaser, any consideration equal to the amount (if any) that the first purchaser paid to obtain the transfer right; (b) if the subsequent purchaser obtained or assumed the transfer right from another subsequent purchaser, any consideration equal to the amount (if any) that the other subsequent purchaser paid to obtain or assume the transfer right; (c) any reimbursement of excluded costs; (d) any increase in consideration that arises because of the operation of section 32V; ***parallel arrangement*** means an arrangement entered into by a subsequent purchaser or an associate of the subsequent purchaser before, at the time or within 12 months after the subsequent purchaser obtains or assumes a transfer right, under which the following occurs— (a) if the subsequent purchaser obtained or assumed the transfer right from a first purchaser—the first purchaser or an associate of the first purchaser is required to construct, or to arrange for the construction of, improvements to the property the subject of the transfer right for consideration; (b) if the subsequent purchaser obtained or assumed the transfer right from another subsequent purchaser—the other subsequent purchaser or an associate of the other subsequent purchaser is required to construct, or to arrange for the construction of, improvements to the property the subject of the transfer right for consideration; ***transfer right*** means— (a) a right to enter into a contract of sale of a property or any part of a property; or (b) a right to a transfer of a property or any part of a property; or (c) an obligation to enter into a contract of sale of a property or any part of a property; or (d) an obligation to accept a transfer of a property or any part of a property. (5) For the purposes of the definition of ***additional consideration*** in subsection (4), a subsequent purchaser or an associate of a subsequent purchaser who enters into a parallel arrangement is taken to have given or agreed to give the consideration under that arrangement in order for the subsequent purchaser to obtain or assume the transfer right in addition to any other consideration given or agreed to be given in order for the subsequent purchaser to obtain or assume the transfer right. (6) For the purposes of subsection (4) and (5), section 32V(3) does not apply in determining the consideration under a parallel arrangement. Section 32V(3) provides that in certain circumstances consideration is to be adjusted to exclude any amount paid or payable in respect of the construction of a building to be constructed on land on or after the date of the relevant transaction. S. 32OA inserted by No. 28/2017 s. 30. 32OA How duty is charged on transfer (1) Duty on a transfer to which this Division applies is not charged in respect of the transfer from the vendor to the transferee, but is charged separately and distinctly on— (a) the dutiable value of the option; and (b) the dutiable value of the subsequent transaction by which the final subsequent purchaser obtained or assumed the transfer right; and (3) Despite subsection (1), duty is not charged under this Division on the dutiable value of a subsequent transaction referred to in subsection (1)(b) or (c) (as the case requires) if duty is charged on the subsequent transaction under Division 2 or 3. (4) Despite subsection (1), duty is not charged under subsection (1)(a) or (c) (as the case requires) on an initial transaction— (a) if a person obtains a transfer right under a latter transaction that is greater than a transfer right the person obtained under the initial transaction—to the extent of the transfer right obtained by the person under the initial transaction; and (b) if a person obtains a transfer right under a latter transaction that is less than a transfer right the person obtained under the initial transaction—to the extent of the transfer right obtained by the person under the latter transaction. A vendor grants an option that entitles persons A and B to require the vendor to enter into a contract of sale of dutiable property (the ***initial transaction***). Under the option, persons A and B each obtain a transfer right to a 50% interest in the property. Under a subsequent transaction immediately following the granting of the option (a ***latter transaction***), person A obtains a transfer right in respect of a 100% interest in the property. Duty is not charged under subsection (1)(a) in respect of the option to the extent of the transfer right obtained by person A under the initial transaction (50%). (5) In subsection (4)— ***initial transaction*** means the option or a subsequent transaction; ***latter transaction*** means a subsequent transaction immediately following the initial transaction. S. 32OB inserted by No. 28/2017 s. 30. 32OB Dutiable value of transactions (1) For the purposes of this Division, the dutiable value of the option referred to in section 32OA(1)(a) is the greater of— (a) the consideration that would need to be given to complete the sale or transfer contemplated by the option (including any consideration already given for the option); and (b) the amount for which the property might reasonably have been sold if it had been sold, free from encumbrances, in the open market on the date on which the option was granted. (2) For the purposes of this Division, the dutiable value of a subsequent transaction referred to in section 32OA(1)(b) or (c) is the greater of— (a) the consideration given or agreed to be given by the subsequent purchaser or an associate of the subsequent purchaser in order for the subsequent purchaser to obtain or assume the transfer right under the transaction, other than any increase in consideration that arises because of the operation of section 32V; and (b) the amount for which the property might reasonably have been sold if it had been sold, free from encumbrances, in the open market on the date on which the subsequent transaction was entered into. S. 32OC inserted by No. 28/2017 s. 30. 32OC When does the liability to duty arise? S. 32OD inserted by No. 28/2017 s. 30. 32OD Who is liable to pay the duty? (a) in the case of duty referred to in section 32OA(1)(a)—by the first purchaser; (b) in the case of duty referred to in section 32OA(1)(b)—by the final subsequent purchaser; (c) in the case of duty referred to in section 32OA(1)(c)—by the subsequent purchaser who obtains or assumes a transfer right under the relevant subsequent transaction. (2) A transferee who pays duty payable under this Division by another person may recover the amount of that duty as a debt due to the transferee from the other person. S. 32OE inserted by No. 28/2017 s. 30. 32OE Exemptions and concessions (1) Duty is not chargeable under section 32OA(1)(a) if the option would be exempt from duty under a specified Chapter 2 exemption if it were a transfer of dutiable property to the first purchaser. (2) If the first purchaser would be entitled to a concession under this Chapter if the option were a transfer to the first purchaser, the first purchaser is entitled to that concession in respect of duty charged under section 32OA(1)(a). (3) Duty is not chargeable under section 32OA(1)(b) or (c) if the subsequent transaction would be exempt from duty under a specified Chapter 2 exemption if it were a transfer of dutiable property to the subsequent purchaser who obtains or assumes the transfer right under the subsequent transaction. (4) If a subsequent purchaser would be entitled to a concession under this Chapter if the subsequent transaction were a transfer to the subsequent purchaser, the subsequent purchaser is entitled to that concession in respect of duty charged under section 32OA(1)(b) or (c). S. 32OE(5) inserted by No. 38/2023 s. 6. (5) If the first purchaser would be entitled to a concession under Part 2 of Chapter 11 if the option were a transfer to the first purchaser, the first purchaser is entitled to that concession in respect of duty charged under section 32OA(1)(a). S. 32OE(6) inserted by No. 38/2023 s. 6. (6) Subject to subsection (7), a subsequent purchaser is entitled to a concession under Part 2 of Chapter 11 in respect of duty charged under section 32OA(1)(b) or (c) if— (a) the subsequent purchaser would be entitled to a concession under Part 2 of Chapter 11 if the subsequent transaction were a transfer to the subsequent purchaser; and (i) a first purchaser who is liable to pay the amount of duty charged under section 32OA(1)(a); or (ii) another subsequent purchaser who is liable to pay the amount of duty charged under section 32OA(1)(c). S. 32OE(7) inserted by No. 38/2023 s. 6. (7) If a subsequent purchaser would be entitled to an exemption under section 250B(2) if the subsequent transaction were a transfer to the subsequent purchaser, the subsequent purchaser is entitled to that exemption in respect of duty charged under section 32OA(1)(b) or (c). Ch. 2 Pt 4A Div. 4 (Heading) amended by No. 28/2017 s. 31.