Nominate later, pay duty twice? VCAT says yes
The Victorian Civil and Administrative Tribunal (VCAT) ruled that property developers cannot avoid double taxation by nominating non-existent companies as purchasers. The court determined that sub-sale duty is triggered because the transfer right only arises once a nominee entity is formally established.
Why it matters
This decision clarifies strict tax compliance requirements for property developers using nominee structures, potentially increasing tax liabilities for similar future transactions.
Co-authored by Marina Basile, Special Counsel, and Ishaan Bungay, Solicitor
VCAT has confirmed that merely intending to use a nominee purchaser is not enough to avoid Victoria's sub-sale duty rules.
In Ramaihi v Commissioner of State Revenue [2026] VCAT 655, a property developer signed purchase contracts in his own name, expecting that newly created companies would eventually acquire the properties. However, he only nominated those companies as purchasers after planning permit applications had been lodged. VCAT found that the nomination triggered the sub-sale duty provisions, resulting in duty being payable twice: once on the original purchase and again on the transfer to the nominee entities.
Mr Ramaihi entered into six contracts of sale as "Hassan Ramaihi and/or Nominee(s)", with the intention of later nominating companies acting as trustees of unit trusts to take title. None of those structures existed when the contracts were signed.
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