23 October 2025
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The Victorian State Revenue Office (SRO) yesterday released Draft Revenue Ruling DA-070 Land Transfer Duty – Consideration – Assumption of Tax Liabilities (DA-070), which explains that the SRO is changing its approach to include certain tax liabilities assumed as part of a transaction to be treated as consideration when determining the dutiable value of a dutiable transaction. This means stamp duty will be payable on a higher dutiable value than previously was the case.
What is changing?
Stamp duty is payable on the greater of the consideration (monetary or non-monetary purchase price) for the transaction or the unencumbered value of the property.
The SRO has announced that where the contract of sale requires the purchaser to provide an additional amount for or towards a tax liability for which the seller is liable in respect of the land (Additional Amount), that amount may form part of the consideration for the transfer of the land.
The Additional Amount may comprise all or part of the seller’s liability in respect of:
- land tax;
- windfall gains tax (WGT);
- congestion levy; and
- rates.
The Additional Amount forms part of the consideration for a transfer of land if – assessed at the time of the transfer and viewing the transaction as a whole – it is part of what moves the transfer. Calling the payment an “adjustment” or directing it to a third party will not change its nature.
When finalised, DA-070 will take effect on 1 February 2026 and will apply to contracts of sale entered into from that date.
When is an Additional Amount consideration?
The below table summarises when the Additional Amount will form part of the consideration, such that stamp duty will be payable in respect of the total of the purchase price and the Additional Amount.
| Impost | Consideration | Not consideration |
|---|---|---|
| Land tax | Purchase price is greater than or equal to the threshold amount (currently $10,400,000 but adjusted annually) and the purchaser agrees to assume some or all of the seller’s land tax or the contract of sale apportions the seller’s land tax liability for the land tax year that includes settlement. | Purchase price is less than the threshold amount (currently $10,400,000 but adjusted annually) so it is unable to be apportioned and therefore cannot move the transfer.[1] |
| WGT | Where no WGT liability exists when the contract of sale is made but the parties provide that if one arises before settlement, the purchaser will contribute an amount for or towards the liability. | Purchaser provides an amount towards a WGT liability that exists when the option or contract of sale is made. This is unable to be recovered and so cannot move the transfer.[2] |
| Congestion levy | When a car park is sold under a contract of sale and the purchaser agrees to provide an amount for or towards the congestion levy. | N/A |
| Rates | Payment to the seller for rates referable to a rating period prior to settlement. | Reimbursement for the seller’s prepayment of rates in relation to the period after settlement. |
Key points for purchasers
It is important to note the following:
- For land tax, the new rules apply only to contracts entered into on or after 1 February 2026.
- The SRO’s views on WGT, congestion levy and rates restate existing practice, but they are now formalised in this ruling.
- Final settlement adjustment figures are often agreed 1-2 days before settlement, making it difficult to accurately calculate the stamp duty liability in advance. Remember to budget accordingly.
- Although DA-070 is a Victorian ruling, other States or Territories may adopt a similar position in the future.
- The SRO is seeking feedback on the draft ruling up until 24 December 2025.
If you have any questions about how the draft ruling might affect your business, please contact Kathryn Bertram from the JWS Tax team.
[1] Sections 10G, 10I and 58(1) of the Sale of Land Act 1962 (Vic).
[2] Sections 10H and 58(2) of the Sale of Land Act 1962 (Vic).