Legislation relating to transfer duty in Queensland has been amended to apply a 3% surcharge where a foreign person purchases residential land (including vacant land to be developed or built on for residential use) in Queensland.

This brings Queensland legislation more into line with similar regimes in New South Wales and Victoria.

Under the Queensland Act, a foreign person includes:

  • A foreign individual – being a person who is not an Australian citizen or permanent resident. 

This test is likely to apply to many New Zealand citizens living in Australia.

  • A foreign corporation – being a corporation incorporated outside Australia or an Australian corporation controlled by foreign persons. 
  • A foreign trust – being a trust in which at least 50% of the interests in the trust are held by foreign persons. 

This is problematic in relation to discretionary or family trusts and trusts deeds may need to be amended to deal with the potential application of the regime.

The surcharge can be applied retrospectively if a foreign person who did not have a controlling interest in a trust or corporation when the land was purchased obtains a controlling interest within three years of purchase.

 

Submitted by Charles Sweeney, Partner and Carly Ashwood, Special Counsel – both of Cooper Grace Ward Lawyers.