Who pays transfer duty?
There is a difference between being liable to pay transfer duty and actually paying it.
You are liable to pay transfer duty when you enter into a dutiable transaction in Queensland.
In most cases, both parties to a transaction (the seller and the purchaser) are liable to pay; however, the purchaser usually pays the duty.
Parties to a transaction
When you sign a contract to transfer land or a land transfer form, you should understand what this means in legal terms.
Consider this scenario: You are the sole owner of a company that owns residential land in Queensland. You want to take the company name off the title and replace it with your name. Would transfer duty apply if you did this?
The answer is yes. Legally, you as an individual and you as the company owner are 2 separate people. While you are simply taking one name off the land title and replacing it with another (and even though both names are essentially yours), this is a dutiable transaction because it involves the transfer of land between 2 different legal entities.
As such, transfer duty needs to be assessed on this transaction. Whether you actually need to pay an amount depends on the exact details of the transaction and any exemptions that may apply.
This also applies to transfers of land between a person in their own name and another legal identity that person has, such as a trustee of a trust.
Liability for duty vs paying duty
To avoid interest and penalties, a dutiable transaction must be assessed and stamped before it can be completed. If you’re a party to the transaction (e.g. you have signed a contract to buy land in Queensland), you’re liable to pay the assessed amount even if you’re the seller. Find out more about lodging and stamping documents.
However, in some cases, you may not have any duty to pay. For example, an exemption or concession may apply to the transaction, or the value of the property you’re transferring is less than $5,000.
Whether you’re required to pay duty or not, you may still need to have the documents for your dutiable transaction assessed and stamped, perhaps to register the transaction or confirm that that no duty is owing.
Receiving an assessment notice
If you lodge your documents for stamping with us (at the Office of State Revenue), we send you an assessment notice telling you how much duty you have to pay. Once you pay that amount, we stamp your documents and mail them back to you. We send the assessment only to the person who lodged the documents.
If a self assessor lodges your documents, they don’t give you an assessment notice. They have their own process for showing you how much duty you have to pay; for example, they may show the amount calculated in our transfer duty estimator or a copy of the assessment they lodge online.
Once they lodge the assessment online, they may give you the lodgement confirmation as a record of what you’ve been assessed for. Similarly, once they receive your duty payment, they can stamp your documents so the property can be transferred.
Speak to your self assessor to better understand their assessment process.
Read more about lodging and paying transfer duty.
Failing to pay
If duty is not paid by the due date, we issue a final demand to the party who received the assessment notice. If the duty remains unpaid, we inform all parties to the transaction that duty must be paid. We may also bring legal proceedings against all parties to recover the debt.