Change in Transfer Duty Rates from 1 August 2011

23 June 2011 Topics: Property and planning law

The Queensland Government handed down its 2011-12 State Budget on Tuesday, 14 June 2011. The Budget includes major revenue reforms and assistance packages. One of those is the change to how transfer duty is now calculated. The Budget now provides for the possibility of an increased temporary first home owner grant to $17,000 in certain circumstances and a new temporary Queensland building boost grant of $10,000.

Timing of new rates

Any contract entered into on or before 31 July 2011 will be subject to the current transfer duty rates. Any contract entered into on or after 1 August 2011 will be subject to the new transfer duty rates.

Principal place of residence rates

The principal place of residence concessional duty will be abolished from 1 August 2011. The removal of the principal place of residence concessional rates will greatly impact on buyers purchasing their principal place of residence where the purchase price is within the range of $480,000 to $980,000.

For example, for a contract entered into on or before 31 July 2011 for the purchase of a principal place of residence for $500,000, a purchaser would expect to pay $8,750 in transfer duty; whereas on or after 1 August 2011, transfer duty for a principal place of residence of the same value will be $15,525.

For further information on the new duty rates for both investment properties and principal places of residence go to: www.budget.qld.gov.au/current-budget/tax-reform/transfer-duty-rates-building-boost.pdf.

First home buyer rates

As is currently the case, no duty is payable on the purchase of a property by a first home buyer where the purchase price is $500,000 or less. Concessional duty for first home buyers will now be capped for the purchase of properties up to $599,999; whereas it currently sits at $549,999. While the increase in the first home concession cap amount will benefit buyers purchasing properties up to approximately $550,000 ever so slightly, first home buyers purchasing properties over $550,000 will be liable for more duty under the new regime.

For example:

  1. For a contract entered into on or before 31 July 2011 for the purchase of a person’s first home for $550,000, the purchaser would expect to pay $10,600 in transfer duty, whereas on or after 1 August 2011, transfer duty for a first home of the same value will be $10,225.
  2. For a contract entered into on or before 31 July 2011 for the purchase of a person’s first home for $599,999, the purchaser would expect to pay $12,850 in transfer duty, whereas on or after 1 August 2011, transfer duty for a first home of the same value will be $18,525.

For further information on the new duty rates for first home duty concessions go to:  www.budget.qld.gov.au/current-budget/tax-reform/fh-and-vlfh-concessions.pdf.

Other rates of duty

Rates of duty for first home buyers, home buyers or investment buyers on properties where the purchase price is $980,000 or more will remain unchanged from 1 August 2011.

First home owner grant and building boost grant

Eligible first home buyers will continue to be able to apply for the first home owner grant, which remains at $7,000.

From 1 August 2011 to 31 January 2012:

  • A first home owner buying or building a new home to live in, where the dutiable value of the property is $600,000 or less, may be eligible to receive a $17,000 first home owner grant, rather than the current grant, which is $7,000.
  • Home owners, investors and corporations buying or building a new home to live in or as an investment, where the dutiable value of the property is $600,000 or less, may be eligible to receive a $10,000 building boost grant.

For information on the eligibility requirements for the first home owner grant and the Queensland building boost grant please visit www.budget.qld.gov.au/current-budget/tax-reform/index.shtml.

Please contact any member of the team if you require any additional information.

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