What is transfer duty
Transfer duty, often called stamp duty, is a tax that applies when property ownership changes hands. It is charged on dutiable transactions such as buying, selling, or transferring property, and is regulated under the Duties Act 2001 in Queensland.
Most people pay transfer duty when they purchase a home or land, but it can also apply in other situations, such as when adding a spouse to a property title or transferring land into a trust. Understanding when transfer duty applies, who pays it, and how exemptions work can help property buyers and owners navigate the process smoothly.
When transfer duty applies
Transfer duty is charged on dutiable transactions, which include:
- signing a contract to buy or sell property
- transferring a share of a property to a spouse or family member
- creating a trust that includes property
- transferring business assets, including leases and commercial property
- acquiring partnership interests involving dutiable property
- granting rights over land, such as easements
In most cases, duty is calculated based on the higher of either the sale price or the market value of the property. Even if no money is paid (for example, when a property is gifted), duty may still be payable.
Who pays transfer duty
Typically, the buyer of a property is responsible for paying transfer duty. However, both parties to the transaction (buyer and seller) may be legally liable for ensuring the duty is paid.
Once a property transaction is signed, the duty must be assessed and paid within 30 days to avoid penalties. If the duty remains unpaid, the Queensland Revenue Office may issue a final demand and take legal action to recover the amount.
Transfer duty for different types of property
While transfer duty most commonly applies to residential properties, it can also apply to:
- business assets, including commercial property, leases, and vehicles
- resource authorities, such as mining or energy leases
- mortgages, where property ownership is transferred
- easements, where legal access is granted over a property
- registered land, including undeveloped land that is subdivided
Some transactions may require multiple types of duty. For example, buying a limousine business may involve both transfer duty on the business assets and vehicle registration duty.
How transfer duty is calculated
The amount of transfer duty payable depends on the dutiable value of the property, which is calculated as the higher of either the purchase price or the market value.
Queensland has progressive duty rates, meaning the more expensive the property, the higher the duty. The Queensland Revenue Office provides an online transfer duty estimator to help buyers calculate their expected duty costs.
Transfer duty concessions and exemptions
In some cases, property buyers may qualify for concessions or exemptions that reduce or eliminate the duty payable. Common exemptions include:
- first home buyers – a concession may apply if purchasing a first home under a certain price threshold
- transfers between spouses – duty may not apply when transferring a share of a home to a spouse
- deceased estates – no duty is charged when property is transferred to beneficiaries of a will
- charities and government bodies – some transactions are exempt from duty
Even if an exemption applies, buyers may still need to lodge the transaction documents for assessment to confirm that no duty is payable.
How to pay transfer duty
Before completing a property transfer, the transaction must be lodged for assessment and stamped. This can be done by:
- a registered self-assessor, such as a solicitor or conveyancer
- the Queensland Revenue Office, if lodging directly
Stamping must usually be completed before settlement to satisfy legal and banking requirements. In some cases, an adjudication fee may apply even if no duty is payable.
Once duty is assessed, an assessment notice is issued, and payment must be made within 30 days. If a self-assessor handles the transaction, they will provide confirmation of the assessed duty amount and arrange for the documents to be stamped.
What happens if transfer duty is not paid
If transfer duty is not paid by the due date, the Queensland Revenue Office will issue a final demand. If payment remains outstanding, they may:
- inform all parties to the transaction that the duty is unpaid
- take legal action to recover the amount owed
- apply interest and penalties for late payment
To avoid these issues, buyers should ensure their transfer duty is assessed and paid promptly after signing a property contract.
How Ensure Legal can help
Understanding transfer duty rules can be complex, but Ensure Legal provides expert assistance to help buyers and property owners navigate the process smoothly. Our team can assist with:
- assessing transfer duty obligations before signing a contract
- applying for exemptions and concessions to reduce duty costs
- lodging and stamping documents to ensure compliance with legal requirements
- resolving disputes or reassessing duty if an incorrect amount has been charged
For professional legal support with property transactions and transfer duty in Queensland, contact Ensure Legal today. Our experienced team will guide you through every step, ensuring compliance and a stress-free property transfer.
