How transfer duty applies to farm-in agreements

Transfer duty concessions apply to certain types of eligible farm-in agreements, where one party (the farmee) spends a stated amount for exploration and development of land subject to an exploration authority held by another party (the farmor) in return for an interest in the authority.

To be eligible for the concessions, you must have either a deferred farm-in agreement or an upfront farm-in agreement. Agreements that have elements of both deferred and upfront farm-in agreements are not eligible for the concessions.

If the only consideration for your farm-in agreement is an exploration amount (the amount spent on exploration activities), transfer duty will not apply to your agreement.

Transfer duty will apply to any other consideration that is not an exploration amount—for example:

• payments for entering into a farm-in agreement
• payments for mining information
• payments (other than exploration amounts) to transfer interests in exploration authorities.

As a farmee, you have ongoing obligations when claiming a concession. The obligations for upfront farm-in agreements differ from those for deferred farm-in agreements.

The following table explains how transfer duty normally applies and the different rules for farm-in agreement concessions.

General transfer duty rules	Transfer duty farm-in concession rules
Dutiable value of a transaction is the greater of the consideration Consideration Transfer duty Generally, the Australian dollar value paid for property in property transfers. Consideration includes monetary and non-monetary payments, such as assumption of liabilities. See section 12 of the Duties Act 2001 for a full definition. for the transaction or the unencumbered value Unencumbered value Transfer duty The value of the property being transferred disregarding any encumbrance; for example, money owed under a mortgage. See section 14 of the Duties Act 2001 for a full definition. of the dutiable property Dutiable property Property that is involved in a dutiable transaction in Queensland. When you buy or sell dutiable property, you’re likely to pay duty. This can include: land in Queensland a transferable site area an existing right a Queensland business asset a chattel in Queensland. Read section 10 of the Duties Act 2001 for more on property types. Parties to the transaction may need to provide evidence of value to confirm the unencumbered value	The dutiable value for a farm-in agreement is limited to the consideration for the agreement
‘Consideration’ generally refers to what is received to transfer the property (usually a monetary amount)	Exploration amounts are excluded. Transfer duty applies to any other consideration for the farm-in agreement, regardless of what it is for
Transfer duty is assessed on the dutiable value when the agreement is entered into	Some parts of the consideration are not assessed with duty until interests in the exploration authority are transferred or retained under deferred or upfront farm-in agreements

Also consider…

• Learn about eligibility for the farm-in agreement concession.
• Find out how to apply.
• Read examples of the concession.