The foreign purchaser additional duty provisions came into effect on 1 July 2015 such that foreign purchasers now pay additional stamp duty (currently 8%) over and above regular stamp duty paid by all purchasers. Discretionary family trusts might technically be considered foreign if they have a wide class of beneficiaries which might include foreign relatives (even though they are not likely to receive any distributions).
Until now, the Victorian Commissioner of State Revenue has been applying what has been called a ‘practical approach’ in relation to the purchase of residential property by certain family discretionary trusts, in that trusts that have foreign beneficiaries but which have not and are not likely to ever receive distributions were not being considered foreign trusts.
From 1 March 2020, this practical approach will no longer be applied, though as a transitional measure, the State Revenue Office will continue to apply the practical approach in relation to transactions where a contract was entered into (or a nomination was made) before 1 March 2020.
From 1 March 2020, you should ensure that your purchasing vehicle is not foreign, or consider amending your trust deed so that there are appropriate restrictions on foreign persons as potential beneficiaries – such amendment must be in place prior to a settlement occurring.
More information can be found at the State Revenue Office web site here: