Stamp Duty VIC - Lease Option

Hi,

I thought I popped his question before I Bug the lawyer -

I need a confirmation on this ...

Is anyone aware that the Vic government has decided to impose
stamp duty on lease options ... that is

if you do a lease option you must pay stamp duty 'upfront' ($300k property approx $12k)?

If so, how about call options?

Many thanks

Hi daba

Yep, that legislation is now in place.  I believe the legislation was deigned to catch large commercial transactions, where a company lease a premises for a long time and also have an option on the premises.  Unfortunately this legislation has also swept residential property into it's net, as the legislation doesn't differentiate between commercial and residential property.

Specifically the legislation relates to the lease side of the transaction, i.e. there has to be a lease involved.  Therefore a residential lease/option is caught  by the legislation and whereas before you were required to pay stamp duty on the upfront Option Fee, you are now required to pay stamp duty on the option Strike Price.

My research indicates that if no lease is involved and you acquire an Option, then you are only liable to pay stamp duty on the upfront Option Fee.

Please don't rely on this advice, i.e. talk it through with your accountant.

Cheers,  Paul

Paul Dobson - Vendor Financier - http://www.negative2positive.com.au
Ph: 0447 973 235 - http://www.jvpropertypartners.com.au
http://www.vendorfinanceinstitute.com.au

Thanks Paul...

This more or less makes lease option, especially sandwich leases very difficult - when you have to pay duty for an 'option' tat you might not exercise.