Western Australian Current Acts Western Australian Current Acts (1) The unencumbered
value of property is the value of the property determined without regard to
—
(a) any
encumbrance to which the property is subject, whether contingently or
otherwise; or
(b) any
overriding power of revocation or reconveyance; or
(c) any
scheme or arrangement —
(i)
that results in the reduction of the value of the
property; and
(ii)
for which a dominant purpose of any party to the scheme
or arrangement was, in the opinion of the Commissioner, the reduction of the
value of the property.
Note for this subsection:
Example for paragraph
(c) —
A owns land that B
wishes to purchase. The land is valued at $1m. Before the purchase, A grants B
a 50 year lease of the land. B is not required to pay any rent under the
lease. A and B then enter into an agreement for the transfer of the land for
$50 000, being the value of A’s interest in the land taking into account
that it is subject to the lease to B.
The unencumbered value
of the land is determined without regard to the grant of the lease if the
Commissioner is of the opinion there is a scheme or arrangement under which A
or B’s purpose in entering into it was to reduce the value of the land.
(2) Subsection (1)(c)
does not apply to or in respect of a scheme or arrangement that was entered
into before 27 December 1996.
(3) For the purposes
of subsection (1)(c), the Commissioner may have regard to —
(a) the
duration of the scheme or arrangement before the dutiable transaction or the
relevant transaction concerning the property; and
(b)
whether the scheme or arrangement has been entered into with a related person
within the meaning given in section 162; and
(c)
whether there is any commercial efficacy to the making of the scheme or
arrangement other than to reduce duty; and
(d) any
other matters the Commissioner considers relevant.
(4) When determining
the unencumbered value of property —
(aa) the
ordinary principles of valuation apply, except to the extent that those
principles are modified due to the operation of another paragraph of this
subsection; and
(a) the
unencumbered value of an undivided share in the property, whether held jointly
or in common, is to be ascertained by multiplying the total unencumbered value
of the property by the share expressed as a fraction; and
(b) it
is to be assumed that a hypothetical purchaser would, when negotiating the
price of property, have knowledge of all existing information relating to the
property; and
(ca)
information relating to the property (including the right to and use of the
information) —
(i)
will be regarded as an attribute of the property; and
(ii)
will not be regarded as something to which an independent
value can be ascribed.
(5) When determining
the unencumbered value of property that is land —
(a) if
the land is the subject of an agreement for transfer, any improvement made to
the land at the expense of the purchaser or transferee before the date
liability to duty arises on the agreement is to be taken not to have been made
to the land; and
(b) if
the land is the subject of a transfer, any improvement made to the land at the
expense of the transferee before the land is transferred is to be taken not to
have been made to the land; and
(c) the
value is to be determined having regard to the use of the land that would best
enhance its commercial value; and
(d) the
value is to be determined having regard to commercial advantages (such as
goodwill) that —
(i)
attach to the location or other aspects of the land; and
(ii)
would affect the price that a reasonable purchaser would
be willing to pay for the land;
and
(e) if
section 36A applies, the value is to be determined having regard to that
section.
[Section 36 amended: No. 1 of 2015 s. 24; No. 12
of 2019 s. 15.]