When you purchase residential property in Queensland, there are a range of concessions available that can reduce the amount of transfer duty (otherwise known as stamp duty) payable to the Queensland Revenue Office (QRO).
When claiming a concession, there a strict guidelines that must be followed, which relate to the type of occupancy, length of occupancy, and undertaking not to dispose of the property within a certain timeframe.
Under the Duties Act 2001, 'Dispose' is defined as transferring, leasing or otherwise granting exclusive possession of part or all of the property to another person. This might include selling the property or renting out one or more rooms or a granny flat.
For First Home Concessions and Home Concessions, you cannot dispose of any portion of the property before moving in, or within 12 months of of occupying it.
When Must I Move Into The Property?
Whilst there are strict criteria that must be followed where leases and tenants are involved, the following timeframes generally apply:
If you claimed a First Home Concession, Home Concession or Specific Foreign Retiree Exemption from Additional Foreign Acquirer Duty (AFAD), you must move into the property within 12 months of settlement.
If you claimed a First Home Vacant Land Concession, you have two years from settlement to build and move into the property.
If you've moved in within the necessary timeframe, but have later disposed of part or all of the property within the first 12 months of occupying the property, you will forfeit the concession from that time. For this reason, you may still be eligible for a partial concession, but you must complete a Notice For Reassessment (Form D2.4). We discuss this in more detail below under What If I Am Not Meeting The Concession Eligibility Obligations?.
What Happens If I Dispose Of A Property?
Simply put, if you dispose of the property before moving in or before the 12 month timeframe, you forfeit the concession from that point onward, even if you continue to reside in or return to the property.
If you obtained a Specified Foreign Retiree Exemption (AFAD)Â when purchasing the property, you'll also lose the benefit of that exemption if you dispose of the property.
Whilst selling a property may seem like an obvious disposal, there are other situations where you may not realise you are disposing of property. This might include:
granting a lease extension to an existing tenant before moving in;
leasing out a room or granny flat on the property within 12 months of moving in;
selling or transferring part of your interest in a property within 12 months of moving in;
within a few months of moving in, you lease out your home or part of your home using an online accommodation sharing platform (such as airbnb or booking.com);
an existing tenant continues to live in the home after their lease expires or for more than six months after the settlement date, whichever is earliest; andÂ
a previous owner does not move out within six months.
The QRO has been known to contact owners and occupiers where other government records indicate a change of ownership or occupancy. If you've moved into the property, and are fulfilling the concession requirements, there's generally no need to contact the QRO. For more details on how they communicate with you, visit their website.
What If I Demolish The Property & Rebuild?
Demolishing a home is not a form of disposal, but you will lose any transfer duty concession if you demolish the existing dwelling before living in it as your principal place of residence.
Even if you eventually rebuild and live on the property, you will not be able to retain any concession you claimed.
What If I Am Not Meeting The Concession Eligibility Obligations?
There are strict requirements that must be met in order to claim a transfer dusty concession. Whilst this article does not dive into these requirements, it is crucial you understand your obligations. When completing a concession form, there is a detailed guide provided that outlines these criteria.
If you claimed a transfer duty concession when you purchased the property, but are no longer meeting the eligibility requirements, you must notify the QRO within 28 days. This is done by submitting a Notice For Reassessment (Form D2.4).
You can complete this form digitally online, noting the change of circumstances in Part F. Alternatively, you can also download the form and email or post a signed copy to the QRO. This is generally recommended where a party is experiencing domestic or family violence.
After a reassessment, you may be required to pay back all or part of the concession. If is an offence to fail to give the appropriate notice that you are no longer meeting the requirements. At the time of writing, the maximum penalty is $13,055. Additional unpaid tax interest and penalty tax can also incurred in some circumstances.
What Is NOT Disposing Of Property
Whilst there is a specified definition, we understand that this word dispose may be confusing to some. Certain circumstances also raise questions as to whether they may be defined as disposal.
For peace of mind, here's a list of some common circumstance we see.
You do not dispose of the property when:
the seller or transferor continues to occupy the property after settlement but vacates it within 6 months of the settlement date;
any existing tenants continue to occupy the property after settlement but vacate it at the end of the current lease term or within 6 months of the transfer date, whichever is earliest. It is important to note that the lease agreement or arrangement must have been in place prior to settlement;
an intervening event occurs, such as a natural disaster or the death or incapacity of the buyer
you (as the owner) transfer part of the land to your spouse and the transfer is exempt from duty under section 151 of the Duties Act 2001; or
you are acquiring residential land that is an accommodation unit in a retirement village and you enter into a retirement village leasing arrangement for the unit.
Need More Information?
The QRO website goes into details of specific examples regarding leases, penalty taxes and more, and also provides an calculator so you can estimate what transfer duty may need to be paid back. t
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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