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.

A contract can become an instalment contract for many reasons including:

    a)   the deposit is more than 10%; or
    b)   the deposit is stated to be non-refundable in all circumstances; or
    c)   the buyer is given a rebate off the purchase price which makes the deposit more than 10% of the rebated purchase price; or
    d)   the Buyer is required to pay money to the Seller (in addition to the deposit if the deposit is equivalent to 10% of the purchase                 price) before receiving a transfer and the amount payable under the contract exceeds market value for what is provided in                     exchange.  For example, a rent to buy contract may require the payment of instalments which exceed the market rent that would           otherwise be payable.

The effect of the contract being an instalment contract is:

1. if the Buyer defaults in the payment of any instalment or part of the purchase price (other than a deposit), the Seller cannot terminate the contract until 30 days after having served a notice giving the Buyer 30 days within which to make payment. If the Buyer chooses to make payment within the said 30 day period (including any default interest payable under the contract), then the Seller cannot terminate the contract as a consequence of the Buyer’s initial non-payment. This means that where the default is in the payment of the balance purchase price, the Buyer can effectively obtain another 30 days in which to settle the transaction;
2. the Seller is prohibited from re-selling or re-mortgaging the property before settlement; and
3. the Seller may be required to comply with the National Credit Code, including the requirements for pre-contractual disclosure, ongoing notices and certain pre-requisites to enforcement.

​Therefore, we suggest the Buyer always instruct his/her solicitor to investigate the possibility that the Buyer’s contract is an instalment contract.

A residential contract requires the Seller to inform or provide the Buyer with a copy of document relating to disputes (if any) between the Seller and neighbouring property owners about dividing fences. These documents are:
    a) notices to fence from a neighbour;
    b) applications to Queensland Civil and Administrative Tribunal (QCAT) for fencing; or
    c) QCAT orders for fencing affecting the property.

In the contract:
​    a) the Seller is required to warrant that there will be no unsatisfied fencing notices, applications or orders existing at settlement; and
    b) if there is an unsatisfied notice, order or application exists at settlement, the Buyer may be entitled to terminate the contract or             claim compensation from the Seller.

QCAT search result does not reveal the presence of any applications in relation to trees that have not yet resulted in an order. This application can only be discovered by a physical search of the QCAT register. We recommend the Buyer instruct their respective solicitor to have a search agent conduct this search.

The Seller must promptly give the Buyer a copy of any notice, proceeding or order, received after the contract date.

The Seller must not give any notice, seek or consent to any order or agreement without the Buyer’s prior written consent after the contract date.