Victorian Numbered Acts

DUTIES AND LAND TAX ACTS (AMENDMENT) ACT 2005 (NO 85 OF 2005) - SECT 4

After section 54 of the Duties Act 2000 insert —

        '55.     Equity release programs

    (1)     No duty is chargeable under this Chapter in respect of a transaction if, on application, the Commissioner is satisfied that it is a transaction taking place on or after 15 June 2005 under an equity release program that results in a change in beneficial ownership of dutiable property, being—

        (a)     the acquisition of a beneficial interest in the property by the financial institution as a result of the execution of the sale contract and payment of the amount payable by the financial institution to the homeowner on the day the sale contract is executed or within 5 business days afterwards; or

        (b)     the extinction of the beneficial interest, or part of the beneficial interest, in the property referred to in paragraph (a).

    (2)     An application for an exemption under this section—

        (a)     must be in the approved form; and

        (b)     must be accompanied by a copy of the sale contract.

    (3)     The Commissioner may require further information for the purposes of this section.

    (4)     In this section—

"equity release program" means an arrangement between a financial institution and a homeowner in accordance with which the financial institution and the homeowner enter into a contract of sale of land occupied as the homeowner's principal place of residence ( "the sale contract" ), under which—

        (a)     the financial institution purchases a part interest in the land; and

        (b)     the financial institution pays the homeowner an amount for that interest on the day that the sale contract is executed or within 5 business days afterwards; and

        (c)     subject to paragraph (d), the homeowner retains legal title to the whole of the land and the land is not mortgaged after the sale contract has come into existence; and

        (d)     the sale contract may be terminated only in one of the following ways—

              (i)     by the homeowner paying an amount to the financial institution; or

              (ii)     if the homeowner vacates the land, by the financial institution requiring the homeowner to pay an amount to the financial institution and the homeowner paying that amount; or

              (iii)     by the homeowner selling the property to a third party and paying an amount to the financial institution on the completion of that sale; or

              (iv)     if the homeowner (or, if there is more than one, the surviving homeowner) dies, by the land being sold to a third party and an amount being paid to the financial institution on the completion of that sale; and

        (e)     the homeowner is not required to make any payments to the financial institution during the life of the sale contract in any form that in substance reflects interest;

"financial institution" means—

        (a)     a financial institution within the meaning of section 3(1); or

        (b)     a friendly society;

"homeowner" means a person of or over pension age who, immediately before entering into the sale contract, holds an estate in fee simple in the whole of the land that is occupied by the person as his or her principal place of residence and whose estate is not subject to any mortgage;

"pension age" has the same meaning as in paragraph (b) of the definition of "pension age" in section 23(1) of the Social Security Act 1991 of the Commonwealth.

    (5)     Two or more persons together are homeowners if each of them satisfies the definition of "homeowner" in sub-section (4).'.