What is a Heads of Agreement?

A leasing HOA is a preliminary agreement that sets out the key commercial terms proposed to be included in the lease. It ensures the parties are aligned on matters such as the rent, outgoings, term length (including any option terms), the permitted use of the premises and security deposits/bank guarantees so as to avoid unnecessary negotiations during the lease drafting process.

Is your Heads of Agreement Legally Binding?

The principles established in Masters v Cameron (1954) 91 CLR 353 set out three possible arrangements for the binding nature of a HOA:

1. The parties agree to be immediately bound by the agreed terms in the HOA and will enter into a formal lease at a later date;
2. The parties agree to the terms contained in the HOA but the performance of those terms is subject to executing a formal lease; or
3. The HOA contains proposed commercial terms only, and the parties do not intend to be legally bound unless and until a formal lease is executed.

The ruling in Masters v Cameron determined that the first two arrangements are legally binding on the parties as they demonstrate an intention for the parties to be bound.

What does this mean for you?

Although HOAs often appear informal, they can create legally enforceable obligations once signed. This can mislead parties into assuming they are not bound when, in fact, they may be.

It is important to carefully review whether the HOA expressly states that it is binding or non-binding, and which provisions (if any) are intended to have immediate legal effect.

Before you sign a HOA, and before your commercial obligations arise, it is important that you seek legal advice in order to protect yourself from unintended legal consequences.

The post Heads of Agreement in Leasing: What You Need to Know Before Signing appeared first on Dobson Mitchell Allport.

These changes should prompt Australians to review their investment structures and estate planning arrangements as the fundamental assumptions underpinning these decisions may have changed.

Broadly the main changes can be grouped into 3 categories:

• Negative gearing
• Capital gains tax
• Trust distributions

Negative gearing

Many investors will be aware of the favourable tax treatment historically available for investment properties. Negative gearing has allowed property investors to deduct an overall rental loss against other taxable income, such as salary and wages. That loss can include deductible rental expenses such as interest on borrowings, rates, repairs, insurance and management fees, but not the principal component of mortgage repayments.

Under the announced Federal Budget changes, residential investment properties held before 7:30 pm AEST on 12 May 2026 will generally continue to be able to be negatively geared under the existing rules. For established residential properties purchased after that time, rental losses may still be deducted under the current rules until 30 June 2027, but from 1 July 2027 those losses will generally only be deductible against residential property income, including relevant capital gains. Excess losses may be carried forward.

The key exception is for eligible new builds. Investors who purchase eligible new build residential properties will continue to be able to negatively gear those properties, including by offsetting rental losses against salary and wages. To qualify, the property must genuinely add to housing supply.

If you are thinking of purchasing an investment property, or you have inherited an investment property, you should consider carefully how the new tax rules may apply before deciding whether to buy, keep, rent or sell the property.

Capital gains tax

Under the current rules, individuals and trusts who sell a CGT asset after holding it for more than 12 months generally only include 50% of the capital gain in their assessable income.

Under the announced Federal Budget changes, from 1 July 2027 the 50% CGT discount will generally be replaced with an inflation-based method. This means that, for gains arising after 1 July 2027, the cost base of the asset will be adjusted for inflation and tax will generally be paid on the real capital gain, rather than the inflationary component.

The Government has also announced a minimum 30% tax rate on relevant capital gains from 1 July 2027. This means that taxpayers who would otherwise pay less than 30% tax on a capital gain may be required to pay tax at a minimum rate of 30% on that gain.

Transitional rules are expected to apply. Gains accrued before 1 July 2027 should generally continue to be dealt with under the existing CGT discount rules, while gains accruing after that date will be dealt with under the new indexation and minimum-tax rules.

As these are announced changes, taxpayers should obtain advice before selling or transferring assets, particularly where assets have been held for a long time, are owned through a trust, or may qualify for small business or main residence concessions.

Discretionary trust distributions

The final pillar of the Government’s proposed tax changes is a minimum tax rate of 30% on the taxable income of discretionary trust distributions. From 1 July 2028, ttrustees of discretionary trusts will be required to pay tax at a minimum rate of 30% of the trust’s taxable income.

Beneficiaries will still need to include their trust distributions in their own tax returns. However, beneficiaries other than corporate beneficiaries will receive a non-refundable tax credit for the tax payable by the trustee. This recognises the tax already paid at the trust level, while ensuring that the income distributed through discretionary trusts is generally not taxed below 30%.

The Government’s announcement specifically excludes corporate beneficiaries from receiving non-refundable tax credits. This is intended to prevent corporate beneficiaries from effectively converting that credit into franking credits (i.e. refundable credits for corporate income tax paid that can be passed on to shareholders), thereby circumventing the minimum tax. However, denial of the credit for corporate beneficiaries could also lead to double taxation of the same income at both the trust level and the company level. Unless this issue is addressed in the legislation, the measure may significantly reduce the attractiveness of corporate beneficiaries and could effectively bring to an end the use of so-called “bucket companies”.

The changes do not come into effect until 1 July 2028, giving businesses and investors time to adjust. Expanded rollover relief is also proposed for three years from 1 July 2027 to assist taxpayers who restructure out of discretionary trusts into companies or fixed trusts.

The minimum tax will not apply to certain categories of income, including primary production income, certain income relating to vulnerable minors, amounts subject to non-resident withholding tax, and income from assets of testamentary trusts that existed at the time the changes were announced.

Other types of trusts, including fixed and widely held trusts (including fixed testamentary trusts), complying superannuation funds, special disability trusts, deceased estates and charitable trusts, are excluded from the new minimum tax.

Draft legislation has not yet been released and is expected to be the subject of consultation with stakeholders prior to enactment.

Consequences

As a result of the Government’s proposed tax changes, many Australians will need to revisit their business, investment and estate planning structures.  Discretionary trusts and established residential investment properties may become less tax effective in some circumstances, including income levels, asset type, family arrangements, succession planning objectives, debt levels and the availability of any traditional rules, exemptions and rollover relief. 

If you are concerned about your current arrangements, or are considering buying, selling, restructuring or transferring assets, it may be time to book an appointment with your estate planning lawyer and financial planner. 

The post Federal Budget 2026: New Tax Changes for Property Investors & Trusts appeared first on Dobson Mitchell Allport.

From 1 July 2026, new anti‑money laundering laws will apply to many Australian law practices, including those that provide services such as property transactions, trusts, companies and certain financial or commercial work.

These changes form part of a nationwide effort to prevent serious financial crime, including fraud and money laundering.  While the new requirements affect how law practices operate behind the scenes, our focus remains the same: providing clear, practical and trusted legal advice.

Why are these changes happening?

Australia is updating its laws to align with international standards and to close gaps that criminals can exploit. Regulators have identified that certain professional services, including some legal services, can be misused for illegal activity if appropriate checks are not in place.

The new laws are designed to strengthen safeguards across the legal and financial system.

Will this affect all legal work?

No. The new requirements apply only to certain higher‑risk legal services, such as:

• buying or selling property
• setting up companies or trusts
• managing client funds
• some commercial and financial transactions

Many areas of legal work, including litigation and court‑based matters, are not affected.

What might clients notice?

For some matters, we may need to:

• request additional identification documents
• ask questions about the nature or purpose of a transaction
• carry out ongoing checks during longer‑running matters

These steps are now required by law and are similar to the checks clients may already be familiar with when dealing with banks or other financial institutions.

What are we doing to prepare?

Dobson Mitchell Allport is actively preparing for these changes by:

• reviewing our internal systems and processes
• training our staff on the new requirements
• ensuring compliance is handled efficiently and respectfully

Our aim is to make this transition as smooth as possible for our clients, with minimal disruption to your legal matters.

Need more information?

If you have questions about how these changes may affect your matter, we are happy to discuss them with you.  Please feel free to speak with your lawyer or contact our office.

The post New Anti‑Money Laundering Laws for Law Firms: What Clients Need to Know appeared first on Dobson Mitchell Allport.

And it continues to become more complicated due to new processes and changes in legislation.

Conveyancing is the legal process involved with the buying and/or selling of property. It requires multiple legal documents to be prepared and submitted to the Land Titles Office, State Revenue Office, and banks to register the change in ownership. These documents have strict guidelines on what is acceptable. An experienced property lawyer or conveyancer can ensure that all documents meet these requirements.

Purchasing a property requires conveyancing searches to be undertaken. Property lawyers and conveyancers have access to the online systems which allow them to easily obtain the search results. The search results are not always easy to understand. A property lawyer or conveyancer is in the best position to read, understand, and relay this information to you.

Conveyancing undergoes frequent changes in legislation and your average person cannot be expected to be aware of all of these changes. In Tasmania, settlements still occur in person where titles, discharge of mortgages, cheques, and other documents are being exchanged. A property lawyer or conveyancer will attend settlement on your behalf and ensure all documents are accounted for.

A property lawyer or conveyancer will always have their client’s best interests in mind when negotiations are required regarding the contract. Property lawyers and conveyancers can provide you with advice that you may not have been aware of and advise on matters that real estate agents are not legally entitled to. This minimises the risk of disagreements with the other side and potentially a legal claim against you.   

Conveyancing can be very stressful, time consuming, and costly if mistakes are made. Having a property lawyer or conveyancer involved can relieve you of this pressure so that you can focus on getting your finances and your house ready to move in or out of. 

If you are buying or selling residential property in Hobart, Devonport or anywhere across Tasmania, Dobson Mitchell Allport have an expert team of property lawyers and conveyancers that can take care of all your conveyancing needs.

For more information, please visit our website at www.doma.com.au/expertise/commercial-and-property/ or Emma Mitchell in our Hobart office on emma.mitchell@doma.com.au or Pia Robertson in our Devonport office on pia.robertson@doma.com.au.  

The post The Importance of Having a Lawyer or Conveyancer When Selling or Purchasing a Property in Tasmania appeared first on Dobson Mitchell Allport.

Now, the withholding percentage is 15% and it applies to every real estate transaction.

For the Purchaser, it creates an obligation to withhold and send to the ATO that 15% amount, if no Certificate is provided.

For the Vendor, it means that unless the Certificate is produced by settlement, then there is a 15% difference on the amount handed over.  For a large Contract price, that is a considerable dent in the funds available at settlement.

Obtaining a FRCGW certificate should be an important task for any Seller, and should be arranged prior to signing any Contract to avoid issues and delays at settlement.

The post Withholding Changes for Sale of Real Estate in Tasmania appeared first on Dobson Mitchell Allport.

Under section 225 of the Duties Act 2001 (Act), certain transfers of primary production land are exempt from duty, including a transfer to a trustee of a discretionary trust of which all beneficiaries are individually named and are relatives of the transferor (or relatives of all shareholders if the transferor is a company or relatives of the named beneficiaries if the transferor is a trust).

It is also a requirement under section 225 of the Act that the trust “may not be varied other than by the addition of a relative individually named in a deed of variation”.

Under the new guidelines, a discretionary trust will not qualify for the exemption if the trustee has the discretion to remove beneficiaries.

This is a significant change in interpretation by the State Revenue Office and will require careful consideration when preparing trust deeds for intergenerational rural transfer purposes.

If you require any assistance, please contact Henry Jones or Craig Bowman in the Commercial Team.

The post Potential duty consequences in Transferring the Family Farm appeared first on Dobson Mitchell Allport.

The key amendments to the Standard Form Contract and the Standard Conditions of Sale are:

• approval of finance rather than making the finance “available”;
• finance on reasonable terms to the purchaser;
• termination rights to the party benefitting from the particular condition;
• GST treatment of the sale; and
• inclusion of electronic signing.

Finance Clause Amendments

Two amendments have been made to the finance clause on the Standard Form Contract. The finance clause now provides that the financer “approves” the loan rather than “makes available to the purchaser” to conform with the terminology and what actually occurs in practice. The loan must now be on terms “acceptable to the purchaser, acting reasonably.” Previously the wording used was “on terms currently available in transactions of a similar nature” which fails to account for the purchaser’s specific circumstances.

Termination Rights to a Party Benefitting from that Particular Condition

Standard condition four (4) has been amended to explicitly state that the party who benefits from the condition can now terminate the contract. For example, if a purchaser is declined finance, it is now clear that they can terminate the contract which avoids situations where a vendor may not mutually agree the contract is at an end.

Goods and Service Tax (GST) Treatment

Standard condition 11(g) has been inserted to provide that if the contract does not specify the sale is plus GST or includes GST, the sale price will include GST if it is not a taxable supply or is not an input taxed supply of residential property and that the sale price is plus GST in every other circumstance.

Electronic Signing

A new clause 22 has been included in the Standard Conditions to allow for electronic signing as an outcome of the increasing prevalence of electronic signing. This clause is in line with the current legislation under the Electronic Transactions Act 2000 that an electronic signature will be conclusive evidence of a signer’s identity however, the Law Society reminds practitioners that verification of identity should occur immediately prior to or after signing to ensure witnessing requirements can still be met.

All amendments made by the Law Society’s Property and Commercial Law Committee are aiming to provide further clarity, fairness and practicality when dealing with real property in Tasmania.

The post Changes to the Standard Form Contract for Sale of Real Estate in Tasmania appeared first on Dobson Mitchell Allport.

Working at Dobson Mitchell Allport has given me an extremely encouraging environment to put the knowledge I gain at law school to practical use. From refining my legal research skills to drafting advice for clients and engaging in business development, Dobson Mitchell Allport does it all! In addition to the experience, I get to work with a team that is incredibly nurturing, and always take the time to answer any questions I have, no matter how basic they are. I also have ample opportunity to seek feedback, which will only (hopefully) make me a better lawyer.

We also give back to the community, which I find important in setting a positive workplace culture. With initiatives to donate to organisations like Dress for Success and the Red Cross, DMA really values its place in the community, and in turn value their employees. I would recommend working here to anyone and everyone, it has been an incredible start to my legal career in Australia.

The post What’s it like working in a leading Tasmanian legal practice? appeared first on Dobson Mitchell Allport.

On 8 April 2024, the Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2024 received the Royal Assent. The Act amends the foreign investment law to:

•           triple foreign investment fees for an application to the Foreign Investment Review Board (FIRB) of an acquisition of established dwellings. Application fees for acquisitions in established dwellings for more than $75,000.00 up to $1,000,000.00 have increased to $42,300.00. Substantially higher fees apply for purchases for more than $1,000,000.00. In most cases the fee is non-refundable; and

•           doubles vacancy fees for established and new residential dwellings for vacancy years commencing on or after 9 April 2024. From that date, the vacancy fee if a property is not occupied or rented out for 183 days (6 months) or more in a vacancy year is an amount equal to double the FIRB application fee paid by the owner.

For further information please contact one of our lawyers in the Dobson Mitchell Allport Commercial & Property team.

The post Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2024 appeared first on Dobson Mitchell Allport.

What is Involved in the NFP Self Review?

The NFP self-review will require NFPs to outline the purpose and activities of their organisation. Additionally, they must detail any specific requirements that grant them exemption.  These are outlined in Division 50 of the Income Tax Assessment Act 1997 and relate ot the following exemption categories:

• Community Service Organisations
• Cultural Organisations
• Health Organisations
• Employment Organisations
• Resource Development Organisations
• Scientific Organisations
• Sporting Organisations

To file the review, the relevant principal authority, being a person responsible for the business, needs to:

• confirm the organisation’s details are current, including addresses, associates and authorised contracts;
• review governance documents and the main purpose of the NFP;
• have a MyGov ID; and
• Link the MyGov ID to the NFP’s ABN to access online services with the Australian Taxation Office.

There will be penalties for those NFPs that do not comply with the new provisions.

Who Does Not Have to Lodge the Review?

There are specific types of entity that are exempt from filing the review.  These are government entities, charities that are registered with the Australian Charities and not-for-Profits Commission (ACNC), state and territory bodies and NFP sub-entities for GST purposes.

Additionally, taxable NFPs are not required to lodge, due to their previous lodgements of income tax returns, or if they have notified the Australian Tax Office that a return is not necessary to be filed for that year.

What does This Mean for Businesses and NFPs?

For NFPs, this is a significant change, and it is important that they take the time to understand the new processes, to ensure efficiency and compliance at the end of the financial year.  Please contact Darren Sheen at darren.sheen@doma.com.au or Henry Jones at henry.jones@doma.com.au for any assistance.

The post Changes to Tax Reporting for Not-for-Profit Organisations appeared first on Dobson Mitchell Allport.