Legislative Assembly for the ACT: 2009 Week 7 Hansard (18 June) . . Page.. 2546..
MR SMYTH (continuing):
The ACT has had a longstanding policy that long-term residential leases are exempted from duty. This bill ensures that the exemption for residential leases will be retained. This exemption would have been abolished under the terms of the 2006 amending legislation. I also note that under proposed section 73(D)(2) the exemption has been backdated to 29 November 2006. That is the date on which the relevant amending legislation commenced. This provision will ensure that there is continuity for the exemption in terms of the overall policy that has been applied both prior to and since 2006.
The second matter is intended to protect the ACT's revenue base. Under this proposal, where a trust is interposed in an ownership structure there will be no duty imposed providing there is no change in the underlying ownership interest. Of course, where there is a change in these interests duty will be triggered as is appropriate.
The essence of this proposal is to clarify the ACT's law. This follows decisions in New South Wales, in particular, that raise questions about this aspect of the law and that cost New South Wales considerable revenue. To this point there has not been any issue raised about the ACT law and therefore there has not been any loss of revenue. This proposal represents taking action before there are problems arising; I compliment the minister on covering this base.
The third matter concerns what is called top-hatting. Top-hatting is a relatively new concept that has emerged following the implementation of certain legislation by the federal government in relation to capital gains tax policy. In simple terms, it involves interposing an entity above an existing structure of entities or interposing a top hat over those existing entities. The purpose of the interposed or top-hatted entity is to provide a simplified structure for property transactions that take place over jurisdictional boundaries, particularly where these are international boundaries.
This proposal will ensure that certain property trusts are not precluded from being involved in certain transactions involving property assets solely because of the structure of the trust. This proposal will also ensure that the ACT remains competitive in the marketplace for property transactions. The implementation of this proposal will reduce administrative and reporting costs.
Mr Speaker, these are simple amendments, sensible amendments. The opposition will be supporting them.
MS HUNTER (Ginninderra—Parliamentary Convenor, ACT Greens) (10:39): The ACT Greens will be supporting the three principal amendments proposed in this bill. The first is in relation to residential long-term lease exemption amendments. It essentially covers a legislative oversight from when the Duties Amendment Bill 2006 passed in 2006.
Duty on short-term commercial leases was one of the taxes scheduled to be abolished on 1 July 2009 as part of the intergovernmental agreement on the reform of commonwealth-state financial relations. These measures were covered by the 2006 act. However, duty on long-term leases was retained as an anti-avoidance measure. In that