Property Law: Property Transfer Duty Concessions Explained
Before you purchase property make sure you understand the ins-and-outs of property transfer duty and eligibility requirements for transfer duty concessions.
One of the few most frequently asked conveyancing questions we get from property Buyers is ‘what is property transfer duty’? and ‘How much transfer duty do I have to pay?’.
Firstly, transfer duty (once known as stamp duty) is a form of tax paid to the Queensland Government (through the Office of State Revenue) by purchasers on transactions relating to property.
Property transfer duty is calculated on either the purchase price of the property, or the market value of the property, whichever amount is higher. However, the amount of transfer duty payable will vary depending on whether the Buyer is eligible for a transfer duty concession.
Eligibility requirements for transfer duty concessions
A transfer duty concession can only be claimed under Property Law by purchasers who are at least 18 years of age, are an Australian citizen or permanent resident, and if one of the following circumstances apply:
- You are purchasing your very first home; or
- You are purchasing vacant land which you will build your first home on; or
- You are purchasing a house or unit which will become your primary place of residence.
Stamp Duty Concessions Guide
1.First Home Concession
To be eligible for the first home concession, you must have never owned property anywhere in the world. You must also:
- move into and live on the property for at least 12 months following settlement; and
- not dispose all, or part of the property within this period. The term ‘Dispose’ includes selling, transferring or leasing the property and renting out any rooms in the house even after you move in. This means that you cannot buy the property, rent it out for a while and then move in, still within the 12-month period. However, the rules are different (and a concession may still apply) if you buy a property with a pre-existing lease.
If you are purchasing your very first property for less than $550,000.00, and the eligibility requirements above apply - then the property transfer duty payable under Property Law will be $0.00. If the property is worth over this amount, then you will not be eligible for a first home concession, but you may be eligible for a home concession (see below).
2.First Home Vacant Land Concession
If you are purchasing vacant land to build your very first home on, then you will be eligible for the first home vacant land concession if:
- Once the house is constructed on the land, you move into the home as your primary place of residence within two years following settlement; and
- Not dispose (see above for a definition) all, or part of the property within 12 months following occupation of the home constructed on the land.
If you are purchasing vacant land for less than $400,000.00, and the eligibility requirements above apply - then the property transfer duty payable will be $0.00.
Importantly, you cannot buy a pre-existing house, knock it down and build a brand new house AND claim the concession. The concession only applies if you are buying vacant land to start with.
The home concession on property transfer duty allows you to claim a concession even when you have owned property before. Similar to the first home concession, to be eligible for the home concession you must:
- Move into the house and live on the property for at least 12 months following settlement; and
- Not dispose all, or part of the property within this period.
The home concession allows you to pay a reduced amount of transfer duty, saving you up to $7,175.00.
First home owners will be eligible for the home concession if they purchase property worth over $550,000.00.
Get in touch with our NAMbour conveyancing lawyers for advice specific to your situation
Every Buyer’s circumstances will differ and you may need specific property conveyancing legal advice from property conveyancing solicitors if you don’t cleanly fall into these categories. Further, there are strict eligibility requirements for transfer duty concessions imposed by the Office of State Revenue. If you make a false declaration, you can be charged extra duty and penalties.
To make sure that you are taking advantage of the best concession for you, feel free to contact the Sunshine Coast conveyancing solicitors from Butler McDermott Lawyers Property Law team in Nambour for a confidential discussion.
Written by Sunshine Coast law graduate Delfina Sutjiadi
This article is not intended to advise you in relation to your specific circumstances and should be used as a general guide only.