Residential land concession toolkit

Transfers of residential land are the most common transactions registered self assessors lodge in QRO Online. Understanding how to correctly assess and lodge these transactions will help your clients correctly claim their entitlements and avoid unpaid tax interest and penalties.

Provided that your clients meet the relevant requirements, they may be able to claim one of these concessions when transferring residential land in Queensland:

• first home concession
• first home vacant land concession
• home concession.

Companies cannot claim a home concession.

Additional duty of 8% applies to acquisitions of residential land by foreign persons (including companies and trusts). Find out more about the additional foreign acquirer duty.

Assessing residential land concessions

Your clients can use our eligibility tester to determine if they can claim a concession for a transfer of land they will use as their home.

Here are some tips to help you self assess a transaction involving a residential land concession in QRO Online.

How to lodge online

You must complete all mandatory fields under each tab in QRO Online. Mandatory fields are marked with a red asterisk.

All concession details must match the client’s declaration on their concession claim form.

There are also some specific data entry requirements for this type of transaction.

• Select Transfer of residential land as the Transaction class.
• In the Type of dutiable transaction drop-down list, select either:
  • Agreement to transfer dutiable property—for transactions evidenced by an agreement
    or
  • Transfer of dutiable property—for transactions evidenced by a transfer only.
• Select Land in Queensland as the Type of dutiable property.
• Select the correct concession for each transferee and enter the transfer and occupation dates. The occupation date cannot be before the transfer date.

Transfers assessed as pursuant to the agreement under section 22 of the Duties Act 2001 are stamped with the same endorsement as the contract. Do not enter these transfers separately into QRO Online.

Related or associated party transactions

You must get a valuation or evidence of value where:

• the transaction is between associated or related persons
  Related person or relative

  Transfer duty

  Related persons are as follows regarding these entities:

  • 2 individuals, if they are family members
  • 2 corporations, if they are related bodies corporate (that is, one of the corporations is a subsidiary, holding company or subsidiary of a holding company of the other corporation)
  • individual and corporation, if the individual or a family member
    • is a majority shareholder, director or secretary of the corporation
    • is a majority shareholder, director or secretary of the corporation’s related body corporate (such as a holding company or a subsidiary)
    • holds a majority interest in the corporation or related body corporate
  • individual and trustee, if
    • the individual is a beneficiary of the trust
    • a related person of the individual (that is, a family member or family company) is a beneficiary of the trust
  • corporation and trustee, if
    • the corporation is a beneficiary of the trust
    • a related person of the corporation is a beneficiary of the trust
  • 2 trustees, if a person is a beneficiary of
    • both trusts
    • one trust and a related person is the beneficiary of the other trust
  • partners in a partnership, only for the purposes of additional foreign acquirer duty (AFAD).
• there is no stated 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 consideration is far lower than the actual value of the property
• the consideration cannot be determined when the liability for transfer duty arises.

Different residency requirements

The requirements for the first home and first home vacant land concessions are different to those of the first home owner grant. If your client claims a concession for transfer duty and receives the grant, they need to meet both sets of requirements in order to keep both benefits.

Learn the differences between the residency requirements of the first home concessions and first home owner grant.

Demolishing a home and building a new one

If your client buys a property with a home on it, demolishes the home on settlement, builds a new one and moves into it, they will not be entitled to the home concession on the home they are buying.

This is because they are not moving into the home that they are buying (i.e. the home that was on the property when they entered into the dutiable transaction for the land)—they are moving into a newly built home.

Two homes on one property

In some cases, people may purchase land large enough to have 2 homes on it. This factor alone does not prevent any of them from claiming a home concession. They can make a claim as long as each person can fulfil the concession requirements.

For example, if a father and son buy a large property with 2 homes on it and the father will live in 1 of the homes and the son will live in the other, both can still claim a home concession.

QRO Online will calculate the concessional duty amount when you enter the transaction. See section 93(2) and (6) of the Duties Act for more information.

Leasehold land

If your client rents a property from a person who owns the land in freehold, generally they cannot claim a home, first home or first home vacant land concession.

But they may be able to claim a concession if they:

• acquire a ‘new right’ that is a leasehold interest; for example, they are leasing or subleasing land that is owned by the state (not an individual or company) on a long-term basis
  and
• pay a premium, fine or other consideration for the right; this means that they pay a sum upfront, as though they were buying the property. This does not include weekly or periodic rent payments.

Non-Australian entity

A non-Australian transferor or transferee must complete an identity details annexure.

For transferors, an email is automatically generated through QRO Online when the transaction is lodged, asking the transferor to complete an online identity details annexure. Contact us for help if you cannot obtain the transferor’s email address.

Transferees must complete an identity details annexure and you must enter these details in QRO Online.

Forms

Your client will need to complete one or more of the following forms to claim a concession:

• Claim for home or first home transfer duty concession (Form D2.1)
• Claim for first home vacant land concession (Form D2.7)
• Identity details annexure—for each non-Australian transferor and transferee.

If, after claiming a concession, a person cannot meet their occupancy requirements, they should complete a notice for reassessment of transfer duty—home, first home or vacant land concession (Form D2.4).

Records you need to keep

For this type of transaction, you must keep:

• the concession claim form for each applicant
• evidence of value if the transfer is between related parties
• an identity details annexure for each non-Australian transferee, if the transaction involves real property.

Find out more about your record-keeping obligations.

Public rulings

You may find the following public rulings useful when self assessing residential land transactions:

• Amounts payable by a purchaser under a special condition of an agreement (DA012.1)
• Extension of time to lodge an agreement transferring dutiable property (DA019.1)
• Concession for homes and first homes—occupancy requirements (DA085.1)
• Inclusions of chattels in the acquisition of a home or first home (DA086A.1)
• Transfer duty concession for homes and first homes—residential purposes (DA087.1)
• Variations to agreements for the transfer of land (DA501.1)
• Residential property transactions: when are valuations required, when are valuation costs to be passed on (DA505.1).

Also consider…

• See the data entry standards for QRO Online.
• Find out more about concessions for homes.
• Read the home concession rates.
• View our endorsing examples if you are unsure how to stamp the documents for transfer duty.
• Get help with QRO Online.