Unfortunately the price on the contract of sale for the property you are buying is not the total amount you will be required to pay at settlement. What many people fail to take into account and budget for is the price of the transfer duty that is payable on the purchase.
Transfer duty, or otherwise known as stamp duty, is a tax imposed by the Queensland Government upon the transfer of property and is payable by the buyer. The amount of transfer duty that is payable is calculated on the purchase price of the property as detailed on the contract of sale.
We’ve written in detail before about what exactly transfer duty is and the property that it applies to and this article will instead provide a quick summary on the concessions that are available to buyers to reduce the amount of transfer duty that is payable.
The full amount of transfer duty will be payable where you are purchasing the property as an investment property, or where you are purchasing the property in the name of a company or trust, as the Queensland Government deems these as investment properties also.
No concession is available either for vacant land if you are not a first home buyer, or are purchasing the land in the name of a company or trust.
Transfer Duty Concession Types in Queensland:
There are three different concessions available that may apply to you when purchasing property in Queensland.
First Home Concession:
If you are purchasing a property in Queensland and you have never owned property in Queensland, another state, or elsewhere in the world, previously.
In order to claim this concession you must have:
- Never owned property previously;
- Will be moving into the property within 12 months of the settlement date; and
- Will live in the property as your principal place of residence for a period of at least 12 consecutive months after you move in.
If the property you are purchasing has previously been used as an investment property as has tenants in it on a lease entered into with the seller you can still claim this concession, as long as you will be moving in within 12 months. You cannot however enter into a new lease with these, or any subsequent tenants.
First Home Vacant Land Concession:
The first home vacant land concession is available if you are purchasing a vacant block of land upon which you will be building your first house, having never previously owned property in Queensland, another state, or elsewhere in the world.
In order to claim this concession you must have:
- Never previously owned in property, whether that be vacant land, or a property;
- Have not previously claimed this vacant land concession;
- Build and occupy a property constructed on the land as your first home, with it being your principal place of residence for a period of 12 consecutive months after moving in, and you must move into the property within two years from the settlement date of the land.
You cannot dispose of the land within one year after you move into the property you construct upon it.
Home Concession:
The home concession is available to all buyers purchasing a residential property in Queensland, even if they have previously owned property in Queensland, another state, or elsewhere in the world, previously.
In order to claim this concession you must have:
- Previously owned property, or be purchasing property that is over the first home concession threshold amount;
- Intend on moving into the property within 12 months of the settlement date; and
- Live in the property as your principal place of residence for a minimum period of 12 consecutive months after moving in.
You can claim this concession where the property you are purchasing has tenants in it on a lease that was signed by the seller, however you may not enter into a new lease with these tenants, or subsequent tenants, for the property after purchasing it.