Real estate: 5 Minute Fix 16: PEXA settlements, e-conveyancing, COVID-19 measures, Windfall Gains Tax

09 Dec 2021
Get your 5 Minute Fix of real estate news. This issue: PEXA settlements and sunset clause limitations in the ACT, NSW moves to 100% e-conveyancing, COVID-19 measures made permanent in QLD, VIC introduces Windfall Gains Tax and WA extends off-the-plan duty rebate until October 2023.


Windfall Gains Tax introduced in Victoria

The Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (Vic) received Royal Assent on 30 November 2021. This legislation amends a range of various taxation and other Acts and most importantly, introduces a new Windfall Gains Tax (WGT).

The WGT will come into operation from 1 July 2023 and is a tax on the increase in land value due to a rezoning. In particular, under the new legislation, a landowner will need to pay WGT on the "taxable value uplift" of land when a "WGT event" occurs. The amount of the WGT will depend on the amount of the taxable value uplift as follows:

Taxable value uplift

Rate of WGT

Under $100,000


More than $100,000 but less than $500,000

62.5% for the part of the taxable value uplift that that exceeds $100,000 

$500,000 or more




Landowners are liable to pay the tax at the time of the rezoning but may defer payment until the earlier of:

  • the occurrence of the next "dutiable transaction" (when they have the cash flow to pay the tax);; and
  • 30 years after the date of rezoning.

Interest will accrue on deferred payments at the 10-year bond rate applying from time to time.

Some dutiable transactions are excluded and transitional exemptions apply for certain contracts, option arrangements and proponent led rezoning's that were underway before 15 May 2021.

For more information about the Windfall Gains Tax and build-to-rent concessions, see our updates here and here.

Extensions to COVID-19 land tax relief

Further land tax relief measures have been announced by the Victorian Government to provide support to commercial landlords and owner occupiers in Victoria.

Landlords (with single or multiple commercial tenancies) who provide tenants with COVID-19 rent relief under the Commercial Tenancy Relief Scheme (between 28 July 2021-15 January 2022), and commercial owner-occupiers (who carry out, or control the business carried out, at the property and who would hypothetically be an eligible tenant under the Commercial Tenancy Relief Scheme) may apply for a 25% deduction in their 2021 land tax assessments for their properties.  Eligible candidates can also apply for a deferral of their remaining 2021 land tax liability (and any 2020 land tax deferred under previous COVID-19 land tax relief arrangements), until 31 May 2022. Landlords must provide genuine rent relief consistent with the Commercial Tenancy Relief Scheme to be eligible.

Eligibility with be assessed by the State Revenue Office and online applications for 2021 land tax relief are now open until 30 April 2022. Applicants must apply for this relief separately from any other previous land tax relief measures.

Changes to the Owners Corporations Act 2006 take effect

Victorian developers must ensure that any agreements they propose to enter into following registration of a plan of subdivision do not infringe the new requirements in the Owners Corporations Act 2006 (Vic) and the Subdivision Act 1988 (Vic), which took effect on 1 December 2021.

The changes include:

  • additional disclosures must be made, and additional documents must be provided, by the developer at the Inaugural General Meeting of an owners corporation;
  • the term of a contract appointing a manager of any owners corporation (which is not in a retirement village) must not exceed three years;
  • owners corporations will fall into one of five "tiers". Tiers will be determined based on the number of occupiable lots, and each tier will have different obligations, including those as to preparation (and in some cases audit) of financial statements and preparation of maintenance plans; and
  • new requirements are imposed on the initial allocation of lot liability and lot entitlements.

Please see here for a more detailed summary of the key changes.

Western Australia

Western Australian Government extends off-the-plan duty rebate

On 9 September 2021, the Western Australian Government extended the stamp duty rebate – at a reduced rate – available to people who purchase off-the-plan units in Western Australia until 24 October 2023. The scheme aims to provide a spike in apartment construction and improve the low vacancy rate, and overall promote investment in Western Australia by increasing apartment supply.

Both owner-occupiers and investors are eligible and the rebate applies to any transfer or foreign buyer's duty payable under the purchase agreement.

Under the extension, pre-construction contracts signed between 24 October 2021 and 24 October 2023 for new residential units or apartments in a multi-tiered strata development will receive a rebate of 50% transfer duty, capped at $50,000. This does not include any penalty tax, interest amounts or legal fees incurred.

There are no caps on the purchase price or value of the property. Multiple rebates can be made by the same applicant in the same or different developments.

A rebate application form must be lodged with Revenue WA within 12 months from the registration date on the certificate of title. For more information visit the Western Australian Government website here.



OSR lodgement timeframes

On 23 November 2021, the Office of State Revenue (OSR) posted the lodgement timeframes for sale contracts settling electronically. When lodging documents or paying duties electronically, it is important to understand key dates and when unpaid tax interest (UTI) will apply.

Lodgement with the OSR Online must be completed by the later of:

  • 60 days from the transaction or document date; or
  • 30 days from the unconditional date of the contract

UTI may be avoided where relevant transfer agreements (s 156D) are lodged correctly on or before the lodgement due date and payment is made within 14 days.

For more information about electronic conveyancing and whether UTI will apply visit the OSR website here.

Queensland electronic signing and remote witnessing measures to become permanent

The Queensland Parliament has assented to the Justice Legislation (COVID-19 Emergency Response - Permanency) Amendment Bill 2021 (Qld) which makes permanent some of the temporary changes introduced in response to COVID-19, including:

  • allowing electronic execution of deeds without a witness, including execution by counterpart and split execution;
  • witnessing of affidavits, statutory declarations and oaths over AV link; and
  • the electronic execution of powers of attorney for a "business" by corporations, partnerships and unincorporated associations without a witness (this does not apply to individuals or sole traders) Note: Companies executing under s.127 did not require witnessing in any event.

The Bill is to come into effect on a day to be fixed by proclamation and in the interim the temporary measures under the Public Health and Other Legislation (Further Extension of Expiring Provisions) Amendment Act 2021 (Qld) which extended the COVID-19 legislation expiry date to 30 April 2022, will continue to apply.

Queensland tenancy law reform: changes to the Residential Tenancies and Rooming Accommodation Act 2008

The Housing Legislation Amendment Bill 2021 was assented to and came into effect on 20 October 2021. The Bill amended the Residential Tenancies and Rooming Accommodation Act 2008, the Residential Tenancies and Rooming Accommodation Regulation 2009 and the Retirement Villages Act 1999.

The amendment has the effect of:

  • providing people experiencing domestic and family violence the ability to end their tenancy;
  • providing a framework for the keeping of pets at the premises, including restricting those grounds on which the lessor may refuse a request;
  • removing the option to end a tenancy without grounds (excluding where a fixed term agreement ends) and including additional approved reasons for lessors to end a tenancy; and
  • incorporating a requirement for a premises to meet the "minimum housing standards".

Not all of these changes have come into effect, with the reforms relating to:

  • pets;
  • ending a tenancy without grounds; and
  • minimum housing standards,

to be implemented over a 3 year period.


Proposed limit on the use of sunset clauses and delay event clauses for off the plan contracts

The proposed Civil Law (Sale of Residential Property) Amendment Bill 2021 (ACT) purports to amend the Civil Law (Sale of Residential Property) Act 2003 (ACT) by inserting a new Part 2A to limit the use of sunset clauses and delay event clauses in residential off-the-plan contracts for sale. This amendment applies to all current off-the-plan contracts as well as contracts exchanged prior to 9 November 2021 that are awaiting completion.

The objectives of this amendment are to:

  • require a seller to give each buyer at least 28 days' notice of a proposed rescission of the contract;
  • prohibit a seller from exercising a right of rescission pursuant to a sunset clause or delay event clause without the consent of the buyer or a Supreme Court order; and
  • prohibit a sunset clause or delay event clause from automatically rescinding the contract.

Rates exemption for commercial landowners affected by COVID-19

The Rates (Commercial Land) Exemption 2021 (No 2) (ACT) commenced on 1 August 2021 and applies to rates payable by commercial landowners that have been affected by COVID-19 for the period from 1 August 2021 to 31 December 2021.

The exemptions available to the commercial landowner under this scheme are:

  • when the landowner is operating a business on the land, the lesser of $10,000 and 80% of rates for two quarters; or
  • where the tenant is operating a business on the land, the landowner may apply for a rate exemption for the lesser of 50% of the rent reduction during the period and $10,000, or two quarters of rates for 2021-2022.

To be eligible, commercial landowners must apply on or before 28 February 2022 and either the landowner or its tenant must be operating a business on the land during this period, and:

  • the tenant's rent must have been reduced during the period, in accordance with the Leases (Commercial and Retail) COVID-19 Emergency Response Declaration 2021 (ACT);
  • the landowner or tenant must have an annual business turnover of less than $50 million and that turnover has reduced by 30% or more; and
  • the landowner has not received any assistance or be awaiting a decision under the ACT's COVID-19 Small Business Hardship Scheme.

PEXA settlements to occur in the ACT by end of 2021

The ACT passed electronic conveyancing legislation last year in the form of the Electronic Conveyancing National Law (ACT) Act 2020 (ECNL). PEXA has announced that it has been approved by the ACT Registrar General under the ECNL to operate as an Electronic Lodgement Network Operator (ELNO) in the ACT. This means that "live" electronic settlements will be able to occur through the PEXA Exchanged, expected to occur by the end of 2021.

For more information, read the PEXA media release available here.


NSW now 100% e-Conveyancing

As of October 11 2021, NSW has transitioned out of paper-based registration of land titles and is now 100% e-Conveyancing. The Real Property Amendment (Certificates of Title) Act 2021 has introduced this change which extinguishes the Certificates of Title (CTs) and the control of the right to deal (CoRD) framework and requires that all Real Property Act Dealings be lodged electronically through an ELNO by a Subscriber.

For more information on the move to 100% e-Conveyancing in NSW, view the guidelines on the website of the Office of the Registrar General NSW here.

Remote witnessing rules made permanent in NSW

In 2020, as a result of the COVID-19 pandemic, NSW introduced temporary measures that permitted the remote witnessing of legal documents over audio-visual link.

On 19 November 2021, NSW passed the Electronic Transactions Amendment (Remote Witnessing) Bill 2021 which makes permanent those temporary measures allowing remote witnessing.

This bill provides that legal documents can be witnessed remotely via a video link where the witness needs to witness the signing in real time and must be reasonably satisfied that they are signing the same document or an exact copy. In efforts to reduce the risk of fraud, witnesses must also endorse the document with a statement that they have complied with these requirements and specify the method used to witness the signature.

Community Land Development Regulation 2021 (NSW)

In July 2021, the NSW Office of the Registrar General sought public feedback on the proposed Community Land Development Regulation 2021 (NSW) which purports to align community scheme and strata scheme laws and simplify the development process for community schemes. The regulation was made on 14 October 2021 and commenced on 1 December 2021.

Some key changes introduced by the regulation include:

  • removing restrictions on associations and owners from purchasing adjoining land outside of the community, precinct or neighbourhood scheme;
  • simplifying the amalgamation process for subsidiary precinct and neighbourhood schemes with parent community schemes; and
  • the ability to terminate a scheme through the Registrar General's office.

Existing management statements and by-laws should be reviewed in accordance with this regulation to ensure that they remain enforceable.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.