Property Nominations in Victoria: Why the Timing of Development Can Trigger Double Duty

Nominating a substitute purchaser under a Victorian contract of sale is common, particularly where property is being acquired for development or investment and the ultimate ownership structure has not been finalised when the contract is signed. 

A nomination does not, however, necessarily avoid additional duty. The outcome can depend not only on who is ultimately nominated, but also on what occurs between signing the contract and the nomination. 

The recent decision of the Victorian Civil and Administrative Tribunal in Ramaihi v Commissioner of State Revenue [2026] VCAT 655 provides a useful reminder of the importance of getting that sequence right. In particular, development activity undertaken before the ultimate purchaser is nominated can have unintended duty consequences. 

For property developers and investors, some early consideration of the proposed ownership structure and timing can therefore make a significant difference. 

The sub-sale provisions 

The sub-sale provisions in the Duties Act 2000 (Vic) can apply where a purchaser under a contract of sale subsequently nominates or otherwise gives another person the right to take a transfer of the property. 

A nomination does not of itself necessarily result in additional duty. The provisions are concerned with particular circumstances surrounding the transaction, including where land development occurs after the contract is entered into but before the subsequent purchaser obtains the right to have the property transferred to it. 

Where the provisions apply, duty may effectively be imposed twice: once by reference to the original contract and again by reference to the subsequent transaction under which the nominee obtains the transfer right. 

This makes the timing of the nomination, and the steps taken before it, particularly relevant. 

What happened in Ramaihi? 

Ramaihi concerned a series of property acquisitions involving a property developer who entered into contracts personally, with the contracts permitting nomination of another purchaser. 

The ultimate purchasing structures involved companies acting as trustees of unit trusts. However, the relevant companies had not been incorporated when the original contracts were entered into. 

Planning permit applications were subsequently made in relation to a number of the properties before the relevant companies were incorporated and nominated as purchasers. 

The Commissioner assessed additional duty under the sub-sale provisions. 

VCAT substantially upheld the Commissioner's position, with additional duty applying to four of the six transactions considered by the Tribunal. 

A significant issue was whether the eventual nominees could be regarded as having the relevant transfer rights from the time the original contracts were entered into. 

The Tribunal rejected that position. As the relevant companies did not exist when the contracts were entered into, they could not at that time hold the relevant rights to acquire the properties. 

The timing of their subsequent incorporation and nomination was therefore significant n determining the duty assessment. 

A planning application can be "land development" 

One of the most important practical aspects of the Victorian duty regime is the breadth of the concept of land development. 

It is not limited to commencing construction or physically altering the property. 

For duty purposes, land development can include: 

• preparing a plan of subdivision or taking steps towards its registration; 

• applying for or obtaining a planning permit; 

• requesting an amendment to a planning scheme; 

• applying for or obtaining a building permit or approval; 

• undertaking work for which a building permit or approval is required; and 

• otherwise developing or changing land in a manner that may enhance its value. 

A purchaser therefore does not need to have commenced building works for the sub-sale provisions to become relevant. An application for a planning permit may be sufficient. 

This is an important distinction for developers and investors because planning and other preparatory work can often commence soon after a property is secured. 

The timing can be critical 

For developers and investors intending to nominate another purchasing entity, the order in which steps are taken can materially affect the duty outcome. 

Consider a purchaser who signs a contract personally intending to establish a new trust to hold and develop the property. 

After signing, the purchaser instructs a town planner to lodge a planning permit application. The purchaser subsequently establishes the trust and nominates its corporate trustee as purchaser. 

The planning application may constitute land development occurring between the contract and the nomination. Depending on the particular circumstances and any applicable exemption or exclusion, this may result in additional duty. 

If instead the intended purchasing entity had been properly established and nominated before the relevant land development occurred, the duty outcome may be different. 

The issue is therefore not that nominations should necessarily be avoided. Rather, the nomination and development strategy should be considered together and implemented in the appropriate sequence. 

The developing VCAT position 

Ramaihi is not an isolated decision. 

In Wilkinson v Commissioner of State Revenue [2024] VCAT 807, VCAT held that a conventional nomination could confer a "transfer right" for the purposes of the sub-sale provisions. 

More recently, in Sky Jade Corporation Pty Ltd v Commissioner of State Revenue [2026] VCAT 421, VCAT again considered nominations in circumstances where planning permit applications had been made. The Tribunal confirmed that the statutory sub-sale regime can apply to a nomination even though the nominee may not have a direct contractual right against the vendor under ordinary contractual principles. 

Taken together, these decisions provide useful guidance for purchasers contemplating a nomination and reinforce the benefit of considering the duty position before development steps are taken. 

Structure first, develop second 

The advice we regularly give clients when embarking on an investment is to start on a solid foundation. In the context of property investment and development, this means considering the intended ownership structure at the outset and, where possible, before the contract is signed. 

This may involve determining whether the property will ultimately be acquired: 

• personally; 

• through a company; 

• by the trustee of a discretionary or unit trust; 

• through a special purpose vehicle; or 

• through another investment or family ownership structure. 

Getting the structure right from the outset can reduce the need to restructure or change the purchasing entity later and allows the legal, duty, tax and commercial implications to be considered before significant steps are taken. 

Of course, commercial opportunities do not always allow every aspect of the structure to be finalised before a contract is signed. Where that occurs, it becomes particularly important to consider the proposed nomination before commencing planning, development or other activities that may constitute land development. 

The words "and/or nominee" in a contract provide useful flexibility, but should not be assumed to allow the purchasing entity to be changed in every circumstance without duty consequences. 

Coordination between legal, accounting and tax advisers 

Starting on a solid foundation also means considering the transaction as a whole rather than the property acquisition in isolation. 

This is particularly important where a property acquisition forms part of a broader investment, development, asset protection, succession or family wealth strategy. Depending on the circumstances, the appropriate ownership structure may require input from the purchaser's lawyer, accountant, tax adviser and financial adviser, each considering the transaction from their respective area of expertise. 

Early coordination between advisers can help ensure that the chosen structure is not only appropriate, but also implemented in the right way and at the right time. 

A structure that achieves the desired income tax, asset protection, succession or investment outcome may still produce an unintended Victorian duty consequence if the implementation steps occur in the wrong sequence. 

For substantial acquisitions, obtaining coordinated advice at the outset can therefore be a valuable part of the transaction rather than something considered only after an issue arises. 

Before nominating a purchaser 

A nomination can remain a useful and appropriate part of a property transaction. Where another entity is to be nominated, however, it is worth considering the duty position before taking steps such as: 

• lodging a planning or building permit application; 

• preparing or progressing a subdivision; 

• seeking a planning scheme amendment; 

• undertaking development or construction works; 

• making payments or entering arrangements connected with obtaining the nomination; or 

• otherwise taking steps which may increase or enhance the value or development potential of the land. 

Not every nomination or development activity will result in additional duty. The outcome depends on the particular transaction, the timing of the relevant steps and the application of the statutory provisions. 

Where the position is uncertain or the transaction is significant, advice can be obtained before proceeding and, where appropriate, a private ruling may be sought from the State Revenue Office. 

Key takeaway 

Property nominations are a common and useful feature of Victorian property transactions. The recent VCAT decisions do not change that, but they do demonstrate why the structure and sequence of the transaction matter. 

For investors and developers, the sequence matters. The best time to consider these issues is generally at the beginning of the acquisition rather than immediately before settlement. 

Starting on a solid foundation – by considering the intended ownership structure, obtaining appropriate advice and coordinating the timing of any nomination and development activity – can help avoid unintended duty consequences while preserving the commercial flexibility a nomination can provide. 

KCT Legal works with property investors, developers, private clients and family groups on property acquisitions, ownership structures and Victorian property transactions. We work with our clients and, where appropriate, their accounting, tax and financial advisers to help structure and implement transactions from the outset. If you are considering acquiring property through a company, trust or other investment structure, or proposing to nominate a purchaser after signing a contract, we recommend speaking with us before taking the next step. 

This article is provided for general information only and does not constitute legal advice. The information may not be appropriate for your particular circumstances. You should obtain specific legal advice before acting or relying on any information contained in this article.