It’s important to note that the government has recently changed the name of Stamp Duty to Transfer Duty. Both Stamp Duty and Transfer Duty are the same thing, this blog post will go by Transfer Duty to avoid confusion in the future.
What is Transfer Duty
Transfer duty is tax the government charges when purchasing or changing the title of ownership on land and property. Transfer duty is only paid by the purchaser and is not applicable if only selling land or property.
Transfer Duty, previously known as Stamp Duty, was first introduced to Australia in 1865. Queensland received it in 1894 and received several policy name changes until we arrived at ‘Transfer Duty’ today.
Foreign residents that don’t have a permanent residency or citizenship for Australia are still eligible to pay Transfer Duty, however, there’s an additional fee.
Transfer duty also differs between states and Queensland has its own rates. These can be calculated on the Queensland Government's website.
When do I pay Transfer Duty?
Transfer Duty for the state of Queensland is paid within 30 days of settlement for both blocks of land and established homes.
For off the plan homes, stamp duty is paid either three months after the completion date agreement or within three months of the assignment of the purchaser’s interest in the agreement (transferring ownership).
How does it apply to land?
Transfer duty is also required on purchases of land as they’re still property and can be built or lived on in most cases.
How does it apply to new builds?
When building a home on a vacant block of land, Transfer Duty will only be paid on the vacant block. This is because your new home has been built, not purchased, so there’s no tax applicable.
This same rule applies when building homes that are off the plan.
How does it apply to established homes?
When purchasing an established home, Transfer Duty is to be paid on both the home and the block of land it sits on. This is because the established house is being purchased or changing ownership, as well as the land not being vacant. Tax for this is estimated by how much you pay for the home and what concessions you can apply for.
Transfer Duty concession in Queensland
The amount of Transfer Duty paid in each state differs, therefore any concessions towards Transfer Duty are also unique to that state.
In Queensland, you’re able to claim the First Home Vacant Land Concession if you’re purchasing a block of land. This is only for first home buyers building on the land.
To be eligible you must meet the following requirements:
have never claimed the first home vacant land concession on another project
have never held an interest in a residence anywhere in Australia or overseas
be at least 18 years of age
be paying market value if the vacant land is valued between $320,001 and $399,999
build your first home on the land, move in with your personal belongings and live there on a daily basis within 2 years of settlement (this time cannot be extended)
only build 1 home on the land
be certain there is no building, or part of a building, on the land when you acquire it
not dispose (sell, transfer, lease or otherwise grant exclusive possession) of all or part of the property before you move in.
Transfer Duty for foreign or NZ residents
If you’re looking to buy property in Australia and you aren’t an Australian permanent resident or citizen, there’s an additional Transfer Duty fee to be able to hold ownership. The additional rate changes yearly within the financial budget so it’s best to contact your financial advisors for more information.
This is not entirely applicable to New Zealand residents living in Australia who fall into a separate category.
For more information, visit your nearest display home and chat to one of our knowledgeable sales consultants.