Duty is calculated on the dutiable value of a property.
Dutiable value includes late settlement interest resulting from:
- a late settlement
- a settlement failing and being rescheduled.
Why is duty paid on late settlement interest?
Late settlement interest is part of the consideration which ‘moves’ the transfer of the land. This was confirmed by a 2020 decision by the Supreme Court of Victoria.
Therefore, it is a component that forms part of the dutiable value of the land. As such, duty is payable on late settlement interest.
Regards: https://www.sro.vic.gov.au/duty-payable-late-settlement-and-default-interest