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Charitable institution exemption

When you are registered as a charitable institution in Queensland, you may be eligible to claim an exemption from transfer duty when you acquire dutiable property. The exemption also applies to trust transactions such as trust creations, terminations, acquisitions and surrenders.

The exemption will only apply if the property is:

  • used solely or mainly for a qualifying exempt purpose (i.e. the core purpose of the institution)
    or
  • used for fundraising activities (e.g. rent derived from a property) that are carried out for a qualifying exempt purpose.

A qualifying exempt purpose includes:

  • religious or educational activities (including kindergartens)
  • care for the sick, aged, infirm, afflicted or incorrigible persons
  • relief of poverty
  • full-time care for children by protecting their wellbeing and giving them food, clothing and shelter
  • another charitable or public benevolent purpose
  • providing a residence to a minister or members of a religious order conducting a previously listed activity.

Property used for an employment or salary package of an officer or employee of a charitable institution is not exempt from duty.

To claim the exemption, you need to provide us with:

  • the documents for the transaction, or a transfer duty statement (Form D2.3) if no documents exist
  • a dutiable transaction statement (Form D2.2)
  • an identity details annexure for each non-Australian transferor and transferee, when transferring real property (e.g. homes, apartments, business premises and vacant land)
  • a written statement indicating that the charitable institution will:
    • start to use the property for a qualifying exempt purpose within 6 months of the liability for transfer duty (e.g. settlement). A later start date may be requested at the time of lodgement but reasons for the delay and an estimated start date should be provided
    • use the property (or the funds from the property) solely or mainly for a qualifying exempt purpose for at least 1 year
    • not use the property for an employment or salary package of an officer or employee
  • a written statement detailing how the property will be used.

Registered self assessors cannot self-assess this exemption. However, they can assess the documents if settlement is imminent, then apply for a reassessment within the specified timeframe.

The Taxation Administration Act 2001 administers the registration of charitable institutions; however, the exemption is applied under sections 414–419 of the Duties Act 2001.

Examples

These examples demonstrate when the exemption applies.

ABC Charity purchased a property to be used as disability accommodation. Its legal adviser lodged the documents including a statement detailing how ABC will use the property within 6  months for a period of 1 year.

The exemption applies to this transaction.

ABC Charity purchased a property to be used as disability accommodation, and is waiting on building approval that will take more than 6  months to finalise.

It will rent the property for 12  months from settlement date and use the money for a charitable purpose.

The exemption applies because the rental will be used for a charitable purpose for the specified timeframe.

ABC Charity purchased a property to be used as disability accommodation

It is waiting on building approval that will take more than 6  months to finalise, and decides not to rent the property during this time.

ABC applies for a later start date for use of the property for charitable purposes when it lodges its documents for the exemption.

If the reasons for the later start date are approved, the exemption will apply.

ABC Charity purchased a property to be used as disability accommodation. The settlement was brought forward by 2  weeks and it needs to settle early.

Its legal adviser self-assesses the contract and transfer, and pays the duty.

ABC has 20  months from the settlement date to lodge a reassessment under section 17 of the Taxation Administration Act.

ABC Charity purchased a property to be used as disability accommodation, and is waiting on building approval that will take more than 6  months to finalise.

The settlement was brought forward by 2  weeks and it needs to settle early. Its legal adviser self-assesses the contract and transfer, and pays the duty.

ABC has 20  months from the settlement date to lodge a reassessment and apply for a later start date under s.17 of the Taxation Administration Act.

ABC Charity purchased a property, but is not sure if it will use the property for a charitable purpose. Duty has been paid on the transaction.

In time, ABC decides to use the property for a qualifying exempt purpose.

The Commissioner of State Revenue would consider a reassessment under section  418 of the Duties Act as long as the property has been used for a qualifying exempt purpose for 1  year.

To claim the exemption, ABC would have to lodge a request for reassessment within 5 years from the date of the original assessment (s.18 of the Taxation Administration Act).