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Stamp Duty in Queensland
Stamp duty in Queensland, also commonly known as transfer duty, is a kind of tax or levy that is imposed in each of the States and Territories on certain dutiable transactions. Stamp duty in Queensland is imposed under the Duties Act 2001. The Queensland Office of State Revenue is responsible for administering stamp duty and provides some guidance on how it is imposed on its website. Stamp duty law is very complex; you should seek legal advice if you think you might have to pay stamp duty.
When stamp duty is imposed
Stamp duty is imposed on certain kinds of dutiable transactions. Queensland has more dutiable transactions than most of the other States and Territories. For example, a transfer of dutiable property such as land is a dutiable transaction. Agreements to transfer dutiable property, surrenders of dutiable property, mortgage foreclosures and creating a trust over dutiable property are other examples of dutiable transactions. The transaction need not be in writing; for example, it can occur electronically. The most common dutiable transaction you will enter into is a contract to purchase or sell your home.
Property subject to stamp duty
Stamp duty is only imposed in relation to dutiable property. Land is the most significant kind of dutiable property. Other kinds include existing rights (e.g. a right to acquire dutiable property or a statutory licence), Queensland business assets (which includes, for example, goodwill and the intellectual property of a Queensland business) and chattels, although chattels will only be subject to stamp duty if they form part of a dutiable transaction with another type of dutiable property. Queensland abolished marketable securities duty in 2007, which was a duty imposed on transfers of shares that were not listed on the ASX. Since then, transfers of shares have not been subject to stamp duty; although they are still relevant to the imposition of landholder duty.
Calculating stamp duty payable
Stamp duty is calculated based on the dutiable value of the property that forms the dutiable transaction. Generally speaking, the dutiable value of the property is the amount paid, or the market value of the property free from interests like mortgages, whichever is greater. There are also specific rules for certain transactions; for example, the dutiable value for the surrender of a lease is the consideration paid for the surrender. Specific rates are then applied to the dutiable value. For example, if the dutiable transaction is a transfer of land worth $600,000, the amount of duty payable is $17,320 plus 4.5% of the amount over $540,000 (i.e. 4.5% of $60,000). The rates used for these calculations change depending on changes in the dutiable value of the property. Transfers for less than $5000 are not subject to transfer duty, but still need to be stamped.
Obligation to pay stamp duty
Unlike the other States and Territories, Queensland imposes the obligation to pay stamp duty on both parties to the transaction, not just the party acquiring the property. However, in practice it is the party who acquires the property who will pay for it.
Process for payment
Stamp duty in Queensland is paid by lodging the original and counterparts of the contract entered into that gives effect to the dutiable transaction with the Office of State Revenue. A cheque for the stamp duty payable is lodged at the same time. A form may also need to be lodged; relevant forms can be found on the Office of State Revenue website. You usually need to lodge all the necessary documents within 30 days of the liability to pay duty arising. There are specific rules for when the liability arises; for example, if the dutiable transaction is an agreement to transfer dutiable property, the liability arises when the agreement is made. You may be required to pay penalties and interest if you fail to lodge on time.
Concessions and exemptions
Queensland has a significant number of concessions and exemptions. For example, there are specific exemptions relating to certain trust transactions (e.g. trust surrenders in relation to family trusts). Transactions made during divorce proceedings are also exempt from stamp duty. The most important concessions you will likely have to rely on relate to purchasing a home or a first home. If you are purchasing your first home and it is worth less than $500,000, the concession is worth $8,750. As the value of the first home increases, the value of the concession decreases. If you are purchasing a home that is not a first home, the first $350,000 of its dutiable value is eligible for a concessional rate of 1% (i.e. $3,500).