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Land Transfer Duty

Land Transfer Duty

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Transfer of dutiable property

Additional duties may apply to Queensland land, business assets and residential leases which are payable when they are transferred.

Most commonly, a duty is payable when property is bought or sold, where the duty is calculated on the basis of the purchase price or unimproved value of the land, whichever is higher. However, duty may be payable on gifts of property, even when no money is exchanged, when property is transferred amongst property, or acquired through a deceased estate.

Duty may be exempted for the purchase of a person’s first home, on some types of transactions from foreign residents or on gifts between spouses.

Duty must be paid in time and in the correct amount to avoid penalties, and you should take legal advice in order to avoid incorrectly paying duty.

Business asset transfers

Duty may be attached to the transfer of business assets whenever they are sold, gifted or leased, with the rate of the duty depending on the type of asset and the relationship between the transacting parties.

Duty may be attached to the following assets:

  • Goodwill;
  • Statutory business licences;
  • Rights under a franchise agreement;
  • Business debts (if the debtor is located in Queensland);
  • Supply rights of the business;
  • Intellectual property; and
  • Personal property such as machinery, equipment and inventory.

Some transfers may be exempt from duty, or eligible for a concession, such as transfers between related entities or involving small business restructures.

It is important that you obtain legal advice to determine the extent of your duty obligations so that you lodge your duty return and pay within 30 days of the transfer to avoid penalties.

Partnership acquisition

Dutiable property transfers in Queensland, including acquiring a partnership interest, trigger duty if the transfer involves Queensland-based assets like real estate, business assets, or intellectual properties.

The duty will apply to the higher of the purchase price or proportionate value of dutiable property within the partnership, with aggregation rules applying to larger transactions, and others for professional partnerships and trust-held interests. Exemptions may apply to transfers between related parties and in small business restructures.

Creation or termination of a trust of dutiable property

Creating or ending a trust which holds Queensland dutiable property (for instance, land, business assets or investments) triggers duty. The duty applies to the value transferred to the trust upon its creation and the value distributed to beneficiaries upon termination.

The rate of the duty will vary depending on the individual circumstances of the transfer, with exemptions and concessions available, as well as specific rules for superannuation funds and unit trusts.

The ending of a trust which holds dutiable property requires careful consideration and should follow legal and financial advice.

Trust acquisition or surrender

Duty applies to acquiring or surrendering interests in dictionary trusts, where the changes to the trust result in a change to a person’s interest in the property held on trust. The rate payable will vary depending on the property type, its value and the relationships of the parties in the trust.

The duty may not be payable for fixed trusts, family trusts or trusts, and the determination of whether or not a duty is payable can be made complex by the the structure of a trust and the surrounding duty requirements.

Additional foreign acquirer duty (AFAD)

In Queensland, Additional Foreign Acquirer Duty (AFAD) applies on top of regular transfer duty, landholder duty, or corporate trustee duty for certain transactions involving foreign acquirers and AFAD residential land. It is currently charged as an additional 7% duty in addition to other duties and property taxes.

The duty applies to foreign individuals, corporations and trusts owning houses, units, and some commercial buildings. Some exemptions and ex-gratia relief exist, as well as the ability for a foreign entity to be re-assessed after three years,

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