Stamp duty, also known as Transfer Duty, is a crucial tax to understand when purchasing property in Queensland. This state tax applies to various property transactions and can significantly impact the overall cost of buying a property. In this article, we'll explore what stamp duty is, how it's calculated, and the key considerations for Buyers, including potential exemptions, concessions, and additional duties for foreign Buyers. Understanding these factors can help you navigate the property market more effectively and avoid unexpected costs.
Stamp duty (also known as Transfer Duty) is a state tax which is payable on dutiable transactions in Queensland. It is calculated on the Property’s dutiable value which is generally the higher of the consideration payable under the Contract and the Property’s unencumbered market value.
As stamp duty is applicable to each transaction, Buyers should ensure that the Buyer named in the Contract is the person or entity that intends to own the Property. Otherwise there is the risk of two or more assessments of Stamp Duty, which can increase the amount payable.Buyers seeking to purchase property for their SMSF and are planning to buy the Property using a bare trustee as purchaser with a loan then risk paying Stamp Duty again when the Property is transferred to the SMSF on repayment of the loan.
Buyers should carefully consider their current and ongoing eligibility for any concession or exemption that you obtain.Buyers who do not pay duty or advise the Queensland Revenue Office (‘QRO’) of changes to their eligibility for concessions or exemptions may be identified (as QRO actively cross-check data held by other government agencies) and can seek to recover any shortfall including penalties and interest. Recovery of incorrect or unpaid duty may occur years after settlement and could compound into substantial amounts.<h2> Do Foreign Buyers Face Extra Duties? <h2>Transactions under which foreign persons acquire land for residential use or development will attract additional duty.
Buyers may be eligible for a home concession on the Stamp Duty if the Property is being purchased to be occupied as their principal place of residence within 12 months after settlement.If eligible, concessional duty rates apply to the first $350,000 of the consideration or value of the home and any part of the price over $980,000.Duty at general rates applies to the value between $350,000 and $980,000.Buyers must satisfy all the Queensland Revenue Office’s strict eligibility requirements; and not dispose of the Property within 12 months of occupying the residence.
Buyers may be eligible for a first-home concession on the Stamp Duty if the Property is being purchased as their first home and will be occupied as their principal place of residence within 12 months after settlement.If eligible, no Stamp Duty is payable for purchases where the consideration or value is under $500,000. The concession progressively reduces as the consideration or value of the Property increases up to $550,000.There is no first home concession where the consideration or value is equal to or greater than $550,000 but Buyers may still be eligible for a home concession.
Buyers may be eligible for a first-home concession on the Stamp Duty if the Property is vacant land and is being purchased to construct their first principal place of residence that they will occupy within 24 months after settlementIf eligible, no Stamp Duty is payable for purchases of first home vacant land up to $250,000 in value. The concession progressively reduces as the value increases up to $400,000. There is no concession where the value of the vacant land is $400,000 or greater and Stamp Duty is then payable at ordinary rates.
Strict eligibility requirements apply to each of these home concessions. Check your eligibility by using the Queensland Government's on-line eligibility test (available on its website at www.treasury.qld.gov.au) or by telephoning the Queensland Revenue Office directly on 1300 300 734.
Usually you will not meet the eligibility requirements for a home concession on duty if:
Buyers lose their entitlement to the full concession if they sell, transfer, lease, extend a lease, rent, surrender a lease to another person or otherwise grant possession of the Property to another person within 12 months of occupying the house. Repayment of all or part of the concession may be required and penalties and interest can apply.
Queensland Revenue Office generally does not consider the following to be a disposal of the Property:
If a Buyer has a business or personal relationship with the Seller or if the consideration for the sale is less than market value, there will be duty implications.Buyers will need a valuation of the Property using three comparable sales within the last three months. If applicable, these valuations must meet certain criteria and are required before duty is assessed and paid. Failure to obtain the valuations can result in serious consequences for Buyers (e.g. the imposition of penalty duty and interest).
If you buy two or more properties or enter into two or more contracts that the QRO considers arise from the one arrangement you may be liable to pay more Stamp Duty based on the aggregate value of the assets being purchased.
This could apply if you have:
Disclaimer: Every property transaction is different, and the information provided may not be relevant to your circumstances. By using this site you agree that the information provided is for general purposes only and does not constitute legal, financial, or professional advice.
