DUTIES ACT 2000 - SECT 55 Equity release programs

DUTIES ACT 2000 - SECT 55

    (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—

S. 55(1)(a) amended by No. 22/2018 s. 12(1).

        (a)     the acquisition of a beneficial interest in the property by the permitted provider as a result of the execution of the sale contract and payment of the amount payable by the permitted provider 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.

S. 55(3A) inserted by No. 47/2020 s. 6(1).

    (3A)     The Commissioner, in accordance with guidelines issued under subsection (3B), may by instrument approve a person to be a permitted provider for the purposes of this section.

S. 55(3B) inserted by No. 47/2020 s. 6(1).

    (3B)     The Treasurer must issue guidelines for the exercise of the Commissioner's power of approval under subsection (3A).

S. 55(3C) inserted by No. 47/2020 s. 6(1).

    (3C)     The Treasurer must cause guidelines issued under subsection (3B) to be published in the Government Gazette.

    (4)     In this section—

S. 55(4) def. of equity release program amended by No. 22/2018 s. 12(2)(b).

"equity release program" means an arrangement between a permitted provider and a homeowner in accordance with which the permitted provider 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 permitted provider purchases a part interest in the land; and

        (b)     the permitted provider 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 permitted provider; or

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

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

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

S. 55(4) def. of financial institution repealed by No. 22/2018 s. 12(2)(d).

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S. 55(4) def. of homeowner substituted by No. 84/2008 s. 9(a), amended by No. 22/2018 s. 12(2)(c).

"homeowner "means a person—

        (a)     who is of or over the age of 60 years on the day on which the sale contract is entered into; and

        (b)     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;

S. 55(4) def. of pension age repealed by No. 84/2008 s. 9(b).

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S. 55(4) def. of permitted provider inserted by No. 22/2018 s. 12(2)(a), amended by No. 47/2020 s. 6(2).

"permitted provider" means—

        (a)     a body regulated by APRA within the meaning of section 3(2) of the Australian Prudential Regulation Authority Act 1998 of the Commonwealth; or

        (b)     a co-operative within the meaning of the Co-operatives National Law (Victoria); or

        (c)     a co-operative housing society within the meaning of the Co‑operative Housing Societies Act 1958 ; or

        (d)     a friendly society; or

        (e)     a body referred to in paragraph (d) of the definition of financial institution in section 3(1); or

        (f)     a person approved by the Commissioner under subsection (3A).

    (5)     Two or more persons together are homeowners if each of them satisfies the definition of homeowner in subsection (4).

S. 55A inserted by No. 22/2021 s. 8.