ARTICLE · 05 NOVEMBER 2023

Paying Victorian duty twice for a property development – what are the implications for NSW?

Coleman Greig Lawyers

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This VCAT decision may have significance in NSW and other state jurisdictions that have landholder duty regimes.

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A recent decision of the Victorian Civil and Administrative Tribunal (VCAT) in Oliver Hume¹ has called into question the 'conventional wisdom' that participating investors to a capital raise for property developments shouldn't cause landholder duty issues for those investors.

The case involved a special purpose investment company (Diamond Creek) developing the property at 272 Broad Gully Road, Diamond Creek in Victoria. To fund development costs, Diamond Creek offered 1,800,000 shares at $1 per share to 18 investors on terms pursuant to an Information Memorandum. Offers ranged from $50,000 to $200,000. Participating investors weren't related to each other and no investor held a significant interest (i.e. 50% or more) when the capital raising was completed.

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