Transfer duty (previously and still commonly known as stamp duty) is a state tax which is payable on dutiable transactions in the State of Queensland. Transfer duty is calculated on the dutiable value of the property which is generally the higher of the consideration payable under the relevant contract and the unencumbered market value of the property.
As transfer duty is applicable to each transaction, you must ensure that the buyer named in the contract is the person or entity that you intend to own the property. Otherwise you risk two or more assessments of transfer duty, which can increase the transfer duty payable.
If you are seeking to purchase property for your Self-Managed Super Fund (“SMSF”) and are planning to buy the property using a bare trustee as purchaser with a loan, then you run the risk of having to pay transfer duty again when the property is transferred to your SMSF on repayment of the loan. We strongly suggest you seek advice on strategy to avoid that additional duty.
You also need to carefully consider your current and ongoing eligibility for any concession or exemption that you obtain.
If you do not fulfil obligations regarding the payment of duty or advising the Office of State Revenue of changes to your eligibility for concessions or exemptions, then they may identify this (as they actively cross-check data held by other government agencies) and can seek to recover any shortfall directly from you including penalties and interest. Recovery of incorrect or unpaid duty may occur years after settlement and could compound into substantial amounts.
From 1 October 2016, transactions under which foreign persons acquire land for residential use or development will attract additional duty which is known as additional foreign acquirer duty. We will discuss the additional foreign acquirer duty in due course.