An Australian State did legislate for riba-free home finance

The federal entry in this corpus on Australia's National Credit Code left one question open and said so: duties on transfers of land are State and Territory law in Australia, a purchase carried out as two transfers can meet duty twice, and whether any State or Territory had made express provision for these arrangements could not be settled at the time. It can be settled for one State. Victoria legislated for them, and did it in the way that is most instructive for a reader of this site: by writing down the mechanics of four financing structures in the driest possible language and never naming the religion they exist for.

THE INSTRUMENT. The Duties Act 2000 (Vic), No. 79 of 2000, read from the authorised version - "Authorised Version incorporating amendments as at 24 June 2026" - published under the authority of the Chief Parliamentary Counsel. The provisions sit in the Part headed "Exemptions and concessional rates of duty" and are sections 57A to 57F. Each carries the same editorial note in the margin: inserted by No. 71/2004 s. 17. The inserting Act is numbered 2004, so these provisions have been on the Victorian statute book for two decades; the precise commencement date sits in the Act's endnotes, which were not read for this entry.

THE PROBLEM THEY EXIST TO SOLVE. In a riba-free purchase the land commonly moves twice: a financier takes title, and later the occupier does. Duty on transfers of land is charged on transactions, not on intentions, so the second movement is exposed to a second charge that a conventional borrower never meets - the whole extra cost falling on the buyer who wanted to avoid a loan. Sections 57A to 57F remove that second charge for four described shapes, and the operative words are the same in each: "No duty is chargeable under this Chapter in respect of the second transaction."

THE FIRST SHAPE, and anyone who has read about a diminishing partnership will recognise it immediately. Section 57A is headed "Land sold initially to financial institution and natural person and then leased to natural person". It applies where "an estate in fee simple in land is transferred from a third party to the financial institution and the natural person as co-owners (the first transaction)", where "at the same time as the first transaction, the financial institution leases its interest in the land to the natural person for a fixed term", and where at the end of that term the institution transfers its interest to the natural person. Co-ownership, a lease of the financier's share, and a final transfer out.

THE SECOND SHAPE is the mark-up sale. Section 57B, "Land sold initially to financial institution and then re-sold to natural person", applies where "a third party and the natural person acting as agent for the financial institution enter into a contract of sale for an estate in fee simple in land", the land is transferred to the institution, and then "the financial institution transfers the estate in fee simple to the natural person for a determined consideration (the second transaction)". A determined consideration: the price is fixed at the outset, which is the defining feature of the structure and the reason it is not a loan.

THE THIRD SHAPE is lease-to-own. Section 57C, "Land sold initially to financial institution and then leased to natural person", covers the agency purchase followed by a lease "that contains an option for the natural person to purchase the estate in fee simple in land (the second transaction)", completed when "the natural person exercises his or her option to purchase the estate in fee simple in land and the financial institution transfers its estate in fee simple to the natural person for a determined consideration". Here the relief reaches further: "No duty is chargeable under this Chapter in respect of the second or third transaction."

THE FOURTH SHAPE keeps legal title with the occupier throughout. Section 57D, "Land sold initially to natural person, beneficial interest then transferred to financial institution", applies where the buyer takes the transfer and, at the same time, "the natural person declares a trust in favour of the financial institution in relation to the natural person's beneficial interest in the land" and takes a lease back, with the trust later determined so the beneficial interest reverts. The same relief applies to the second or third transaction.

AND TWO SECTIONS FOR WHAT HAPPENS TO REAL LIVES IN THE MIDDLE OF A TWENTY-YEAR ARRANGEMENT. Section 57E, "Change of financial institution", relieves the transfers where "the financial institution transfers its estate in fee simple in land to another financial institution" on condition that the new one completes the arrangement - refinancing, in other words, which without this section would have been another dutiable movement of the land. Its relief is wider still: "No duty is chargeable under this Chapter in respect of the first or second transaction." Section 57F is headed "If the natural person dies", and relieves the transfer of the interest held under the arrangement to another natural person by testamentary gift, by survivorship or under the administration statute. A legislature that drafts for the death of a customer mid-arrangement has thought about the product properly.

THE DRAFTING TECHNIQUE IS THE SAME ONE THE UNITED KINGDOM USED, AND THE SILENCE IS GATED RATHER THAN ASSERTED. The words Islam, Islamic, Shariah, Sharia, Muslim, halal, usury and usurious appear nowhere in the whole Act. Victoria described the transactions instead: who transfers to whom, when, and in what order. The United Kingdom provision in this corpus defines its home-purchase plan the same way, by mechanics rather than by name. The two instruments are doing different jobs - one draws a regulatory perimeter, the other relieves a tax - and this entry does not treat them as equivalents. What they share is that two legislatures both found it possible to legislate for a religious community's finance without mentioning the religion.

WHO COUNTS AS THE FINANCIER, and this is the limb that matters most to a reader choosing a provider. The Act defines a financial institution as an "an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth", a co-operative, a co-operative housing society, or "a body approved by the Governor in Council by Order published in the Government Gazette". A provider that is not a bank is therefore outside the relief unless an Order has brought it in. Whether any particular body has been so approved is a question about the Government Gazette, which was not read for this entry, and nothing here should be taken as saying that any named or unnamed provider is or is not within these sections.

WHAT IS NOT RELIEVED, and a reader should hold on to this. The first transaction is not relieved by any of these sections. What Victoria removed is the doubling, not the duty. A buyer using one of these structures in Victoria should expect to meet duty once, as a conventional buyer does; these provisions exist to stop the arrangement costing a whole extra charge, not to make it cheaper than a mortgage.

WHAT THIS ENTRY DOES NOT CONCLUDE. It reaches no conclusion about whether any structure described in these sections is permitted as a matter of fiqh - a State legislature relieving a tax has made no Shariah determination, and the shape of a transaction described for duty purposes is not a ruling about it. It does not say whether any particular arrangement actually satisfies section 57A, 57B, 57C or 57D, which depends on documents this entry has not seen. It names no provider and grades none. It reads no ruling or practice of the Commissioner.

WHAT REMAINS OPEN, HONESTLY. Only Victoria was read. New South Wales publishes its own legislation but its site refuses automated access from here, as does the usual case-law mirror, so no other State or Territory statute was checked and this entry asserts nothing about any of them - not that they lack an equivalent, and not that they have one. A reader outside Victoria should assume nothing from this entry about their own State, and should ask before they sign.

WHY THIS BELONGS BESIDE THE FEDERAL ENTRY. Australia now has two primary texts in this corpus and they see the same transaction from opposite ends. The Commonwealth defines credit widely enough to catch a deferred-price sale without naming it, in order to regulate it. Victoria describes the same movements of land in order to stop taxing one of them twice. Neither says anything at all about whether the arrangement is permitted. That question was never theirs, and a reader who confuses a tax exemption for an endorsement has read the wrong document.