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Easements & Covenants
 
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Guideline



Easements and Covenants

(print version)

The purpose of this guideline is to clarify when the Duties Act 2001, particularly Chapter 2, applies to easements, restrictive covenants, notable interests and agreements under Part 5 of the Land Use Planning and Approvals Act 1993.

Easements



An easement is ‘a right enjoyed by the owner of land over the lands of another’ (Osborn's Concise Law Dictionary (7th edn), Sweet & Maxwell, London, 1983, p. 127).

Therefore it is an interest in land. An interest in land is dutiable property.

Any transaction that amounts to any of the following three situations is dutiable–
  • a transfer of an easement whether conditional or not; or
  • a grant or surrender of an easement; or
  • a vesting of an easement by or as a consequence of a statute or court order.

The one exception is where an easement is created by and contained within a Schedule of Easements attached to a Sealed Plan.

Where an easement is transferred (other than as part of a transfer of the land itself), granted or vested, the duty payable is to be assessed on the dutiable value of the easement.

Where no consideration is provided, the value in most cases will be nominal. However, each easement will be assessed on its own circumstances.

Covenants and Restrictive Covenants



A covenant (including a restrictive covenant over land) is an agreement creating an obligation. Where a covenant is attached to land it is an interest in land and therefore is dutiable property.

Any transaction that amounts to any of the following three situations is dutiable –
  • a transfer of a covenant; whether conditional or not; or
  • a grant or surrender of a covenant; or
  • a vesting of a covenant by or as a consequence of a statute or court order;
is a dutiable transaction.

Where a covenant is transferred (other than as part of a transfer of the land itself), granted or vested, the duty payable is to be assessed on the dutiable value. Where no consideration is provided, the value in most cases will be nominal. However, each convenant will be assessed on its own circumstances.

Agreements relating to part 5 of the Land Use Planning and Approvals Act 1993



Agreements relating to part 5 of the Land Use Planning and Approvals Act 1993 are exempt transactions under section 227(1) (ia) of the Duties Act.

Currently the State Revenue Office has an arrangement that a Part 5 agreement does not need to be endorsed as exempt.
(Read Revenue Ruling PUB-DT-2005-3 - Instruments Subject To Exemptions That Are Not Required To Be Lodged With The Commissioner For Stamping)

For More Information

contact the SRO.


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