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Property News Alert: Queensland Introduces 3% Stamp Duty Surcharge for Foreign Investors

News Alert 17 June 2016

As foreshadowed in the Queensland budget, a Bill to amend the Duties Act was passed by the Queensland Parliament on Friday 17 June 2016.

  1. An additional 3% stamp duty will apply to acquisitions of direct or indirect interests in residential property from 1 October 2016 by:
  • A foreign individual, i.e. a person who is not an Australian citizen or permanent resident.
  • A foreign corporation, i.e. a corporation where 50% or more of the voting power or shares is controlled by a foreign person, foreign corporation or a foreign trust (or combination of them).
  • The trustee of a foreign trust, i.e. a trust where 50% or more of the trust interests are owned by a foreign person, foreign corporation or foreign trust (or combination of them). For discretionary trusts, this would require 50% or more of the takers in default to be foreign for the purposes of the Act. 

The proposed amendments do not include the various exemptions available under the Foreign Acquisitions and Takeovers Act. The additional duty will be payable even if the approval of Foreign Investment Review Board is not required - such as an acquisition by a New Zealand citizen who is not an Australian resident or an acquisition by the spouse of an Australian citizen who is not a citizen or permanent resident of Australia.

  1. The surcharge will also apply to transfers of an interest in a partnership, corporation or trust which owns residential property to a foreign person, foreign company or foreign trust. 
  2. Changes in control of a trust or corporation within 3 years after the initial acquisition of residential land will also trigger the additional duty. If within 3 years from the date of the original acquisition a corporation or trustee becomes a foreign corporation or trustee of a foreign trust, then liability for duty will arise.
  3. The proposed Act gives the Commissioner a first charge on the land for any unpaid foreign acquirer duty and also gives a person liable for duty who pays duty on behalf of a foreign acquirer the right to recover the additional duty from the foreign acquirer as a debt. Under the Duties Act, both the seller and the buyer are liable for duty to the Commissioner regardless of the terms of the contract of purchase.

Other changes

The proposed legislation also:

  • makes changes to the transfer duty concession for interfamily transfers of family primary production businesses; and
  • increases the Queensland first home owners grant from $15,000 to $20,000 for the purchase of new homes or units entered into between 1 July 2016 and 30 June 2017 provided the other eligibility criteria are met.

For further information about these changes and how they might impact you please contact Lynette Reynolds.

Lynette Reynolds, Partner

News Alert 17 June 2016
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