Video transcript for lodging a transfer duty transaction webinar

[Narrator]

Hello, everyone. My name is Brian and I’m a senior revenue officer with the Queensland Revenue Office, Client Operations Division. Today I have my colleague Kelvin joining me and we’ll be showing you how to submit a transfer duty transaction, plus more.

Before we get started, I’ll take you through some the functions of the webinar control panel. The first feature of the panel is the orange arrow button. This button enables you to minimise or maximise your control panel. For the audio, you can either use the computer audio option or listen to the webinar via your phone. If you select the computer audio option, the sound will come through your computer speakers or headphones. If you use the phone call option, you’ll have to dial in the number shown on your webinar control panel and insert the codes.

As the system puts you on mute for the webinar, you won’t be able to talk to us directly during the session today. If you do have a question, email us. Contact details will be provided at the end of the presentation. We’ll provide a response as soon as we can.

During our presentation you’ll hear the following terms used:

• E-conveyancing—obviously it makes it easy for instruments and documents needed for property transactions to be prepared, signed, settled and lodged digitally
• Electronic settlement—means a paperless settlement without any face-to-face contact
• ELNO—stands for an electronic lodgement network operator. Currently, there are 2 ELNOs approved in Queensland, being PEXA and Simpli
• ELNO workspace—is a space to collaborate electronically with other parties involved in the conveyance transaction and property settlement
• Paper settlement—is the traditional way of settling with the exchange of paper and cheques. A manual endorsement (or stamp) on the instrument and/or transfer form is required with that method
• QRO Online—is a secure and convenient way for self assessors to manage, lodge and pay your transactions
• Verify—is a term used to ensure that the data in QRO Online matches what has been entered in your ELNO workspace; the verify process commences in the ELNO workspace.

Now let’s have a look at what we’ll be covering today. We’ll begin our presentation walking you through the 5 parts that make up a draft transfer duty self assessed transaction that is going to settle electronically through the ELNO workspace. We’ll then talk about lodging a transaction without an ELNO workspace. There are a few differences that you need to be aware of. Then we’ll look at duplicate transactions, why they’re generated and how to self-resolve. And to finish, we’ll go through the main ELNO errors and warning codes that display and how to resolve these.

Before starting any type of lodgement process, 2 critical questions must be asked: Can this transaction be a self assessed in the first place? Refer to the SA1 guidelines for self assessors, available on our website, for a full list of what transactions can and can’t be self assessed. If the transaction is not able to be self assessed, then the documents will need to be sent to the Commissioner for assessing. E-conveyancing is not an option for transactions that are not able to be self assessed.

The second question to be asked: Is this transaction compliant with section 156d of the Duties Act 2001? Just because a transaction can be self assessed doesn’t automatically mean that e-conveyancing is in play. Once again, the SA1 will assist you in making this decision.

There are a couple of nuances that may prevent e-conveyancing; for example, a transferee with only a single name or no surname or first name.

Let’s start with how you, a registered transfer duty self assessor, can lodge a transfer duty transaction with an ELNO. Given it’s going to be an electronic settlement, you will have created your ELNO workspace and completed the Form 1 transfer and Form 24. In your workspace, after selecting Enter duty information, you would select how the duty is going to be paid. Once you have successfully done this, your ELNO workspace will display a 9-digit transaction number starting with the number 5. Take a note of this number, as this is the draft QRO transaction that you’ll need to complete in QRO Online.

After you have a transaction number displaying in your ELNO workspace, you’ll then log in to QRO Online and go to the self assessor dashboard and select Lodgements on the left-hand side. The most critical point I’m going to make on this slide is at box number 2: if your transaction is being settled using e-conveyancing, do not select the ‘Create transaction’ button—that is only used if you’re doing a paper settlement.

If you select ‘Create transaction’, you’ll never be able to verify the transaction. The advantage of having a pre-populated draft is that there is less data entry, as known information about the participants is brought across from the ELNO workspace. For the settlement process, there is one source of truth, being your ELNO workspace.

As we work our way through the transaction, some pre-populated fields will be greyed-out in QRO Online. To make changes, exit the QRO Online transaction, update the ELNO workspace and then select Verify in your ELNO workspace. This action will pre-populate the transaction with the latest information.

The Lodgement screen displays all transactions in a status of ‘draft’. You’ll be looking for a draft transaction with the same number displayed in your ELNO workspace. The screenshot being displayed shows 1 draft transaction with the blue ‘Lodge’ button on the right-hand side. After finding the correct draft transaction to complete, select the blue Lodge button at box number 3. The act of doing this will not automatically lodge the transaction—it allows you to prepare the draft for lodgement. The QRO transaction number should always be quoted if you communicate with us via phone or email.

A QRO Online transaction has 5 parts. The first of the 5 parts is Identification.

As you go through each, you’ll be prompted to save your draft. This can be done at any time throughout the lodgement. Apart from the QRO transaction number, there are 2 additional fields being displayed, being your file reference and the ELNO transaction number.

You have free text to enter your file reference at box number 4. Doing so gives you the ability to search on the reference number when using the search features in QRO Online. The ELNO transaction number will also be displayed. If this field is not pre-populated, you’ve commenced the transaction like you’re starting a paper settlement by selecting ‘Create transaction’.

You’ll need to select a transaction class. You’ll also be given a selection of 6 to choose from. Given e-conveyancing must involve land at this stage, you’ll likely be selecting either ‘transfer of residential land’ or a ‘transfer non-residential land’, which covers rural, commercial land etc. Step-by-step toolkits set out what is required to be selected.

I will show you how to easily find these toolkits and other training material towards the end of the presentation.

The type of transaction class you choose will determine what options are available as you complete the transaction.

You’ll be asked to select the type of dutiable transaction. You’ll be given a choice of an ELN lodgement or a relevant transfer agreement (section 156D). Basically, if you have a contract for land and a transfer and there is no duty exemption applicable, you have a relevant transfer agreement. By making this selection, you’re automatically given an additional 30 days from the transaction date to lodge. So from an interest perspective, it pays to make the correct selection. To have an ELN lodgement, you would have a transfer but no contract. An ELN lodgement can be exempt; however, be mindful that not all exemption types can be self assessed or settled electronically. A lot of family law matters are settled under this type of dutiable transaction.

Next, at box 8 you’ll be asked to select the type of dutiable property. The system will default to ‘Land in Queensland’. The transaction document date will be pre-populated from the ELNO workplace. If that date is not correct in QRO Online, save the transaction as a draft and close the transaction. Then, in your ELNO workspace, make the change then go to the transfer duty page and select Verify. This will automatically update your draft transaction in QRO Online. To verify in your ELNO workspace, look for the down arrow next to the 2 cogs on the right-hand side of the screen. The unconditional date at box 10 should always be entered. By entering that date, when submitting the transaction the system will always work out the best outcome from an interest perspective.

Public ruling DA019.1 further explains this. And if you are not familiar with this, I recommend you have a read.

Moving along, we’re up to the second part being ‘Document details’. There are 3 components to this part, being property details, transferors and transferees information. The first question to answer: Is the property a new building or residence? If it’s never been occupied before, answer ‘yes’. The second question being: Is the property a residential or off-the-plan purchase? If so, answer ‘yes’. An off-the-plan purchase typically has a long settlement period and titles are often not created when the contract is first entered into. The third component is the real property information as displayed at box 13. This information comes across from the ELNO workspace. Obviously it’s critical that this information is correct. If changes are required, update your ELNO workspace and verify to update the pre-populated information.

We’re now at the transferor section. We need to click on the pencil to enter the transferor details for each transferor. In our example, we only have the 1 transferor. The transferor’s name will pre-populate. The date of birth field is not mandatory.

The next question at box 18 is: Is the transferor a non-Australian entity? In simple terms, if the transferor is an Australian citizen answer ‘no’. If they’re not an Australian citizen, answer ‘yes’. If you don’t know, there is unknown option. If you answer ‘yes’, the transferor will need to have an email address as they will be emailed a link to complete an identity details annexure, which among, other things, requires the country of residence for tax purposes to be disclosed. If you enter your email address and phone number, you’ll receive the identity details annexure and text messages so it’s really important to make sure that these are correct.

Address details for the transferor need to be entered. This would normally be the address as listed on the contract. As discussed in the previous slide, at box 19 you may be required to insert an email address for the transferor. Any field with a red asterisk is mandatory.

We’re now up to the transferees information. The first question at box 20 will be: Are any of transferors related to any of the transferees? If you answer ‘yes’ to this question, you need to consider whether you’re required to attain a valuation or market appraisal. There is a public ruling on this topic; refer to public ruling DA505.1.

To complete the transferee details, click on the pencil.

Okay, we’re getting to towards the business end. The names, dates of birth, interest to be held will come across from the ELNO workspace. If changes are required at the draft stage, make the changes in the ELNO workspace and then verify. There are a few rules to be mindful of, especially as QRO Online and the ELNO workspace request information in different ways. As already mentioned, if the transferee only has one name or no surname or first name (for example) it’ll be out of scope. If you’re unsure, check with your ELNO provider.

If a transferee has 2 first names and a surname, electronic settlement can still be done. In QRO Online, the second name will be displayed in the middle name field. You’ll still verify, so please don’t try and change it.

All names will be in capitals. If they’re not, make the change in your ELNO workspace and verify to pre-populate the updated details.

If the transferee qualifies for a transfer duty concession, the concession type is selected from the drop-down list. Please don’t apply a concession without first having the completed, signed and witnessed claim form with your records. There is an option to select the section 151 particular residence exemption. This is only selected from here if there is non-residential land included in the transaction; for example, a house on a farm. In most cases the exemption will be claimed from the drop-down list of exemptions. If you’re not getting the option to insert an exemption, you have not selected an ELN lodgement in the type of duty transaction field. The particular residence exemption has its own toolkit, which should be referred to when applying this exemption.

If a concession is being claimed, you’ll be asked for the transfer date. This is normally the date of settlement. You’ll also be asked for the occupation date. There are restrictions depending on the concession type selected.

In Queensland, there is a 7% additional foreign acquirer duty on residential land. Without deep diving into the subject, you’ll need to determine if the transferee is a foreign person or an agent acting for a foreign person, and whether they are a non-Australian resident. Remember we said that if they’re an Australian citizen, you answer ‘no’ to that question. For the purposes of this training, I’ve answered ‘no’ to the AFAD questions, resulting in no further questions being asked. For more details on the AFAD questions, refer to the guides that accompany the claim forms or the dutiable transaction statement Form QRO D2.2.

For the transferees, you’d enter the current postal address. We’d ask that you take care in entering their email address and telephone numbers, as these may be used post-settlement to communicate with the transferees in regards to their concession obligations. At least 1 telephone number is mandatory. I would encourage you not to put in your own contact details; I’m sure you don’t want us contacting you post-settlement.

Okay, we’re making progress. We’re now up to the third part, Transaction details.

In the consideration section, you’ll be asked if the acquisition is wholly or partly by way of gift. If ‘yes’ is answered to the gift question, either the first home concession or first home vacant land concession may be ineligible. This will depend on the unencumbered value of the property. If the consideration amount is less than the unencumbered value, select ‘yes’; otherwise select ‘no’. This is pre-populated from the information entered from your ELNO workspace.

If ‘no’ has been pre-populated in the consideration is less than the unencumbered value question, you’ll need to insert the consideration amount for the transaction. You will also be asked for the calculated value of 100% interest based on consideration. If it’s a full transfer and market value is being paid, then the 2 consideration amounts will be the same.

A scenario where there will be a difference is partial transfer. If you have a client transferring a half-interest in a $1 million dollar property for the amount of $500,000, you would have $500,000 in the ‘consideration’ field and $1 million in the ‘calculated value of 100% interest’ field. If ‘yes’ has been pre-populated—that is, the consideration is less than the unencumbered value—you’ll only be required to enter the unencumbered value for the full property. If a concession is being claimed, you’ll be asked to provide the value of any non-residential land that does not attract a concession at box 28. An example might be the purchase of a farm. A home concession might apply for the house but not the farm as a whole.

The last question relates to aggregation, which we’ll discuss on the next 2 slides.

If there is more than 1 contract or property being transferred, you’ll need to determine if aggregation applies. Aggregation ensures that the matter is taxed as one. Once again, we don’t have time to deep dive; however, there is some good material in our aggregation toolkit, including a link to an interactive help that’ll assist you in making a decision as to whether aggregation applies. I’ll discuss aggregation a bit more on the next slide.

In the example above, I’ve indicated that aggregation applies. By answering ‘yes’ in the transaction information in the transfer form in your ELNO workspace, I then need to state if this is the first transaction in the arrangement. In this case, I’ve answered ‘no’.

I’m then required to enter the previous transaction numbers already entered in the series of box 32. If I had 2 contracts for $1 million each, I’d then enter $2 million in the cumulative consideration assessed field build of box 33. Each time a transaction is entered, you build on the previous transactions. A home concession can still apply even if aggregation is applicable. Problems arise if the source of truth, being the ELNO workspace, indicates that aggregation applies or doesn’t apply and QRO Online has the opposite recorded. Update the transaction information in the transfer form in your ELNO workspace and then verify to update the draft QRO transaction. Just make sure you’re out of the transaction in QRO Online.

For the purposes of this webinar, I’ll state that no aggregation applies.

Okay, the hard work’s been done.

Let’s get to the liabilities part of the transaction. Based on the information that you’ve entered, the system will calculate a liability. At box 35, there’s an offset for any transfer duty paid on a previous option agreement. Note that any penalty tax or unpaid tax interest is unable to be offset. If aggregation is applied, it would also be an offset for any transfer duty assessed in earlier transactions. A good tip is to know how much is payable before you enter the transaction. Best way to do this is to use the transfer duty calculator before you begin. I’ll show you an easy way to access the calculator towards the end of the presentation.

If you need to go back and make changes, like entering a home concession, when you return to this page select the blue Calculate button to update the liability. Administrators will also see a red Delete button. Do not select the button unless you’re wanting to delete the draft transaction. If you delete the transaction in error, you can request to have the draft reinstated. An alternative option is to remove the transfer in your ELNO workspace and start the process again.

We’re at the final part, the Declaration. Enter the declaration details, including your name, contact phone number and email address and select the tick box acknowledging that you’re aware of your obligations under both sections 122 and 123 of the Taxation Administration Act 2001.

You’re now ready to review the transaction. Select the blue Review button. If there are any errors, they’ll be displayed in the top right-hand corner of the screen. You’ll need to scroll through the transaction to rectify any errors before selecting Review again.

A good practice to adopt at the review stage is to save the transaction and draft, get out of the transaction and verify the transaction in the ELNO workspace. While you may not have made any changes in the workspace since you last verified, the other side may have updated their records. An example might be the transferor solicitor updating the trust name.

Once any errors have been resolved and you’ve selected Review, the transaction will be at the stage where it can be submitted. Remember: at any stage during the transaction you can select Save as draft. Be mindful that if you submit the transaction early, you will then have 14 days to make full payment. It may be advantageous to hold off submitting until close to the settlement—this will depend on a lot of factors including when the contract may have gone unconditional. You may wish to refer to public ruling DA019.1 in relation to the extension of time to lodge. Just remember: verifying your ELNO workspace while the transaction is in draft will pick up the last-minute changes.

Now you’ve seen the 5 steps for lodging a transfer duty transaction. During the presentation, I’ve made references to toolkits, calculators, interactive help, forms etc. In QRO Online, we have training and support material at your fingertips. I encourage you to familiarise yourself with what can be assessed by QRO Online using the training and support function. There’s also material available on our QRO website including our self assessor guidelines.

As we’ve already discussed, e-conveyancing is not available for all types of transactions. Some cases you’ll need to create your own manual transaction in QRO Online or request a Commissioner assessment by sending in your documents and forms for assessment. The paper settlement will require you to enter all the information in manually. To start your manual transaction for a paper settlement, you’ll need to select Create transaction. A transaction for a paper settlement requires the exact same details as if you’re doing an ELNO transaction. With a paper settlement, there is no pre-populated fields, so you’ll therefore need to enter all details directly into QRO Online. Do note that there will be additional questions for paper settlement in the Identification section.

I want to discuss submitting a transaction when the contract has already been sent into the office for Commissioner assessing and the assessment has been paid in full. While e-conveyancing is not an option, what I’ll teach you may save you time having to send in original documents by the post for Commissioner assessment. When doing a manual transaction, you’ll be asked if there is an agreement in writing. If there is a contract to sale, answer ‘yes’. If there is a contract, you’ll then be asked if there is a transfer document, such as a Form 1. Select ‘yes’ if there is a transfer that is exempt under section 22 of the Duties Act. If you answer ‘yes’ to this question, you’ll be asked: Has duty been previously paid on this agreement? If duty has been previously been paid, you’ll be asked to enter the transaction numbers where duty was assessed.

You’ll also be asked if all details are the same. If you answer ‘yes’, you’ll be taken straight to the declaration page. There are certain transactions that are not able to be self assessed, such as the charitable institution claiming an exemption. While you’re unable to self assess the contract, you’ll be able to use this feature to endorse the original transfer with the self assessed transaction number. By emailing the contract in for Commissioner assessing and, at the appropriate time, endorsing the transfer, the postage of original documents will not be required as discussed. As discussed, transactions that have been assessed by the Commissioner are not able to be settled using e-conveyancing.

I’ll now hand you over to Kelvin.

Thanks Brian and hi everyone. My name is Kelvin and I’m a senior investigations officer with the Queensland Revenue Office. I’ll be going through the second part of the presentation with you and first off we’ll be starting with duplicate transactions.

Duplicate transactions occur when a single transaction is entered into QRO Online more than once, which results in multiple unique transactions being created. The actions required to cancel the duplicate transaction will depend upon whether or not it’s been submitted in QRO Online. Here are a few tips to help reduce the number of duplicate transactions generated.

• When generating a draft transaction from your ELNO workspace, QRO Online and your ELNO workspace exchange information.
• Only click on the ‘Enter duty information’ and ‘Save’ buttons once. If you do this multiple times without giving the systems time to interact, it will create duplicate transactions in QRO Online.
• Be mindful that removing and re-entering a transfer in your ELNO workspace will generate a new draft transaction in QRO Online.
• In most cases, you can amend a transfer in your ELNO workspace without removing it. If you need to correct a submitted QRO Online transaction, contact us first via email. I’ll provide you with the email address in a later slide.
• If you have created multiple transactions, the QRO Online transaction number displayed in your ELNO workspace is the one that needs to be submitted from the list of drafts in QRO Online.

If you’ve submitted the duplicate transaction in QRO Online, you can submit a transaction cancellation request form, which is located on the QRO website. This request can only be used if you’ve submitted more than 1 lodgement for the same transaction and is not to be used for a cancelled agreement. If you do have a transaction that is no longer proceeding, please refer to Public Ruling DA115.1. The ruling sets out the requirements for a reassessment to be made to reassess the liability to nil. As reassessments are unable to be self assessed, you will need to lodge the required documents and supporting evidence with the Commissioner. For more information, visit the QRO website.

If you haven’t submitted the duplicate transaction in QRO Online— that is, it’s currently a draft—your administrator can delete that draft transaction for you. Simply navigate to the Lodgement tab and select Lodge on the transaction you wish to delete. Scroll to the bottom left-hand corner of the page (I believe on the Liabilities page) and click on the Delete button. Please ensure that you’re not deleting the transaction that’s displayed in your ELNO workspace.

When verifying duty in your ELNO workspace, you may receive a warning message, an error message or both. Remember when I said that QRO Online and your ELNO workspace exchange information? Well, that same exchange occurs when you verify duty. These messages occur when the information entered into QRO Online and the ELNO workspace is different. To avoid these messages, please take your time to double-check your transaction prior to clicking Submit.

The next segment will be on the more common warnings and errors, what they mean and how to move forward.

A verification message with a ‘W’ at the beginning means that it’s a warning. The ‘W107 transferors do not match or transferor’s details do not match’ is the most common warning. Remember, it occurs when there’s a difference in your ELNO workspace and what’s in the QRO Online transaction. This warning is displayed when there’s a difference in the spelling of a name or middle names, when, the dates of birth don’t match or when an ABN or ACN number does not match. Always check your verification result as some warnings are simply that, and they will still allow settlement to proceed. In all cases, the warning is a result of changes to the transferor’s information in your ELNO workspace after the draft transaction has been generated.

A verification message with an ‘E’ at the beginning means that it’s an error. The E114 error is a common error where the transferee details do not match. Again, this occurs when there’s a difference between your ELNO workspace and what’s in QRO Online. This warning is displayed when there’s a difference in the spelling of the name, missing middle names, when dates of birth don’t match, when an ABN or ACN does not match or when the interest acquired does not match. If it’s a partial transfer, you need to indicate that a proprietor is remaining on title when preparing the transfer.

The E147 error occurs when trust details don’t match. This error occurs when there’s a difference between your ELNO workspace and QRO Online relating to the trust name for either the transferor or the transferee. The error is caused by a difference in the spelling of a trust name, or the trust details have been added or amended after the transaction’s been submitted. This error code will always be accompanied by either an E114 (if it relates to a transferee) or a W107 (if it relates to the transferor). If your client has chosen to not disclose the trust on title, then the trust details should not appear in QRO Online.

Here are some helpful tips to reduce error and warning messages.

• In your ELNO workspace, from the transfer duty page, select Verify duty prior to submitting the transaction in QRO Online. Provided you’re out of the draft transaction, this will update the draft with the most current details from your ELNO workspace.
• Be careful when entering in names and dates of birth of participants as they need to be 100% correct.
• And please take time to review the transaction prior to submitting it in QRO Online.

If you need assistance with the transaction that has been submitted, here are some tips to help you get the matter resolved quickly.

• In cases where the QRO transaction has been submitted, QRO staff may need to intervene to make changes to the transaction in order to resolve error or warning messages.
• If settlement of that transaction is occurring soon, clearly state the settlement date and time in an email in the subject line. Priority will be given to settlements occurring on that day.
• Please include a copy of the transfer form and Form 24 part A.
• And always list the error or errors and warning codes that you’re receiving. We are unable to assist you unless we know which error or warning code or codes are appearing.

Here are our contact details. If you can’t find the answer to your question in the online material, please contact us by phone or email. Due to the volume of requests that we receive, please ensure you allow sufficient time for us to assist you.

That now brings us to the end of the webinar for today. We really hope that you have found this session useful. If you have any questions, please email or call us on the contact details shown on the screen. As you do close the webinar, a feedback survey will appear in your web browser—we’d really appreciate it if you took just a few minutes—it only takes a few minutes—to complete that, as it lets us know your thoughts on today’s session. And your feedback really does help us and it helps us to plan future webinars as well.

So again, thank you for joining this webinar and have a great rest of your day. We’ll see you next time. Thank you.

Watch the video of the lodging transfer duty transactions webinar.