Additional Transfer Duty Applicable for Foreign Acquirers of Residential Property
As announced in the 2016 Queensland State Budget, additional foreign acquirer duty (AFAD) has been imposed in Queensland as of 1 October 2016 as part of the Duties Act 2001. This is an additional amount of transfer duty, landholder duty or corporate trustee duty for foreign purchasers acquiring residential property.
A person is a foreign acquirer if they are:
- An individual other than an Australian citizen or permanent resident;
- A corporation incorporated outside Australia or a corporation which foreign persons have a controlling interest; or
- A trustee of a foreign trust – a trust where 50% or more of the trust interest are foreign interest.
This addition will impact foreign people acquiring property in Queensland that is or will be used solely or primarily for residential purposes. Therefore, this can include:
- Homes and apartments;
- Vacant land which a home or apartment will be built;
- Land for residential development; and
- Buildings refurbished, renovated or extended for residential use.
Other residential land such as retirement villages and student accommodation are considered on a case-by-case basis and will not include land used for hotels and motels.
For transfer duty transactions, corporate trustee transactions and private landholder duty transactions where property is in a personal name or where the landholder is a private entity, the AFAD is imposed at 3% of the dutiable value of the relevant acquisition. This is added to the standard duty imposed in a standard dutiable transaction involving dutiable property.
Special rules are imposed for acquisitions in a public landholder. Given that these matters are often complex, we recommend that you seek legal advice for your specific circumstances involving acquisitions in a public landholder.
It should be noted that Form 1 (Land Registry Transfer) and Form 24 (Property Information Transfer) will not be updated at this time to reflect AFAD. Therefore, Form D2.2 version 5 (Dutiable Transaction Statement) should also be submitted when submitting these forms.
Given the complex rules involved in determining whether or not a person or entity is a foreign acquirer, we recommend that you seek legal advice when purchasing dutiable property in Queensland. Feel free to contact us at firstname.lastname@example.org or call 1300 HATZIS (1300 428 947) if you would like further clarification on AFAD regulations.
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