Expanding the reach of Landholder duty: The impact of Tao’s Case (Understanding Landholder Duty in Victoria)

Tax Law,Property Law: 13 March 2026

Author: Marco Saccotelli - Our People

Landholder duty can apply when someone gains control of a company or trust that owns property in Victoria, even if no land or shares are transferred. This article explores the topic and considers if specialist legal advice may be required to avoid this issue.

Landholder duty can apply when someone gains control of a company or trust that owns property in Victoria, even if no land or shares are transferred. The recent Tao decision confirmed that simply becoming the person who effectively makes the financial or operational decisions of a landholding entity may be enough to trigger duty. This has major implications for restructures, changes of directors, and governance updates for entities holding Victorian property worth $1 million or more.

The decision in Tao v Commissioner of State Revenue [2025] VSC 831 (Tao) will have significant ramifications for owners of Victorian real property held in private companies or closely held unit trusts if the Victorian Supreme Court’s decision is upheld in the Court of Appeal. The case deals with the landholder duty provisions of the Duties Act 2000 (Vic) (the Act).

What are the ‘Landholder ‘Provisions?

The landholder duty provisions provide that duty is assessable at general ad valorem (according to value) rates when a relevant acquisition (such as shares and units) occurs in a landholder that has land holdings in Victoria with an unencumbered value of $1 million or more.

How Section 82 Expands the Definition of a Relevant Acquisition

A relevant acquisition is an acquisition of a significant interest in the landholder and defined as:

• for a private unit trust scheme – an interest of 20% or more;
• for a private company or wholesale unit trust scheme – an interest of 50% or more; and
• for a listed company or public unit trust scheme – an interest of 90% or more.

In addition to the above thresholds, section 82 provides that a person makes a relevant acquisition of 100% (subject to the Commissioner’s discretion to reduce this percentage) if they acquire the capacity or ability to determine or influence the outcome of the landholder’s financial and operating decisions. Practitioners have generally considered that this provision was a catch all anti-avoidance rule where, typically, an outsider to the trust or company gained control of the corporate trustee or private company.

Understanding the Control Provisions in Section 82

The ‘acquisition of control’ provisions are extremely broad and were successfully applied by the Commissioner of State Revenue Office in Tao.

Tao was the first for the VSC in interpreting s. 82 and confirmed that landholder duties arise even when no land is transferred, given Tao’s pre-existing position within the WCT Unit Trust.

Practical Implications of the Tao Decision

Key Points:

• section 82 provides that where a person acquires control over the landholder in terms of directing the managerial and financial decisions, that acquisition of control can be deemed a relevant acquisition.
• s. 82 of the Duties Act 2000 (Vic) (Duties Act) has a broad application (unsurprisingly).
• Following this decision, future transactions relating to the changing of Directors, as in this case, or shareholders of corporate trustees of entities that own Victorian land with a market value of AU $1 million or more should carefully consider the possible implications of s.82 as this could result in exposure to penalties.

How the Supreme Court Interpreted Section 82

Following the VCAT decision, Tao’s appeal to the Supreme Court was ultimately refused, and furthermore the Court clarified the following points:

1. Landholder duty applies to change of director and change of control.

This was the case in Tao’s circumstances primarily because no land was transferred, and Mr. Tao was already acting as a trustee of the WCT Unit Trust but became the sole director.

2. Section 82 is a “discrete head of duty”.

The Supreme confirmed the position that s.82 is not tied to the traditional acquisition concepts. It forms its own duty.

3. “Control” means practical influence.

Becoming the sole director is enough to impose the duty.

4. The Commissioner’s discretion can reduce the deemed 100% acquisition

VCAT reduced the Commissioner’s original imposed 100% acquisition to 85%, due to Mr. Tao’s pre-existing economic interest in the WCT unit trust.

When Director Changes Trigger Landholder Duty

Future restructures and exposure to Landholder duty:

In relation to future restructurings and the potential exposure to duty arising from changes in the directorship of a corporate trustee, the Commissioner submitted that duty will not be triggered by every change of director.

This is particularly so where management and control remain diversified, and no single individual assumes effective control. However, Mr. Tao’s circumstances were materially different. Upon becoming the sole shareholder and sole director, he acquired complete control of the corporate trustee, thereby squarely engaging the change-in-control provisions and triggering the imposition of duty.

Key Risks for Owners and Advisors After Tao

The decision in Tao underscores the expansive reach of s.82 of the Duties Act 2000 and confirms that landholder duty can arise absent any transfer of shares or units, where a person acquires practical control of a landholding entity.

By characterising s.82 as a discrete head of duty and adopting a broad conception of “control”, the Supreme Court has significantly heightened the risk profile of internal restructures involving corporate trustees and unit trusts. Going forward, advisers and landholders must carefully assess changes in directorship, shareholding, and governance arrangements to mitigate unexpected duty, penalties, and interest exposure.

Key Things to Check:

Before making changes to directors, shareholders, or governance arrangements in an entity that holds Victorian land worth $1 million or more, consider whether the change will:

• Consolidate control in one individual (e.g., someone becoming sole director).
• Shift practical decision‑making power, even without transferring shares or units.
• Alter governance documents in a way that gives someone greater influence.
• Change the balance of management control within a trustee company or unit trust.

If any of these apply, landholder duty under s.82 may be triggered, and specialist advice should be sought.

Need Advice on Landholder Duty or Restructuring?

Please contact Marco Saccotelli, Special Counsel at Aitken Partners, to speak about your obligations and options.