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Additional foreign acquirer duty residential land toolkit

This toolkit brings together everything you need to know about self assessing additional foreign acquirer duty (AFAD) on relevant transactions involving AFAD residential land.

Chapter 4 of the Duties Act 2001 provides that additional duty may be imposed on relevant transactions involving AFAD residential land.

AFAD applies to direct and indirect acquisitions of AFAD residential land in Queensland by foreign persons at the following rates:

  • 3% where the transaction's liability for transfer duty arises between 1 October 2016 and 30 June 2018
  • 7% where the transaction's liability for transfer duty arises on or after 1 July 2018.

The same parties who are liable to pay transfer duty on a transaction will be liable for AFAD, if it is imposed.

Assessing AFAD relevant transactions

Use the AFAD interactive help to determine if AFAD applies to the property being acquired in the relevant transaction.

A relevant transaction subject to AFAD with multiple lots of land contained in one instrument may be entered into OSR Online. Multiple instruments that together form substantially one arrangement and include an AFAD-relevant transaction can also be assessed in OSR Online, aggregated under section 30 of the Duties Act. In both instances, the AFAD residential land value is entered separately.

AFAD-relevant transactions may also be completed via electronic conveyancing, with the residential land value entered separately if applicable.

Here are some tips to help you self assess these types of transactions in OSR Online.

How to lodge online

You must complete all mandatory data fields under each tab in OSR Online. Mandatory fields are marked with a red asterisk. There are some specific data requirements.

AFAD transactions involving existing rights

  • Select Transfer - Other than land as the Transaction class.
  • In the Type of dutiable transaction drop-down list, select either:
    • Agreement to transfer dutiable property - for transactions evidenced by an agreement
    • Transfer of dutiable property - for transactions evidenced by a transfer only.
  • Select Existing right as the Type of dutiable property from the drop-down list.
  • Answer Yes to one of these questions:
    • Are you a foreign person?
    • Is the transferee an agent for a principal?
    • Is the principal a foreign person?
  • Answer Yes to the question: Is or will the land be AFAD residential land?
  • Enter the entire value of a 100% interest in the AFAD land. (For example, if the transferee is acquiring 50% of AFAD residential land valued at $750,000, enter $750,000.)

AFAD transactions involving residential land

  • Select Transfer of residential land as the Transaction class.
  • In the Type of dutiable transaction drop-down list, select either:
    • Agreement to transfer dutiable property - for transactions evidenced by a contract or agreement
    • Transfer of dutiable property - for transactions evidenced by a transfer only.
  • Select Land in Queensland as the Type of dutiable property.
  • Answer Yes to one of the following questions:
    • Are you a foreign person?
    • Is the transferee an agent for a principal?
    • Is the principal a foreign person?
  • If a concession applies, provide this information for each transferee:
    • Transfer date (usually the settlement date)
    • Occupation date as declared on your client's Form D2.1
      For a first home vacant land claim (Form D2.7), enter the transfer date plus 2 years. (The occupation date cannot be before the transfer date.)
  • Enter the value of any non-residential property where the property contains a non-residential component (e.g. a dwelling with shop attached).
  • Answer Yes to the question: Is or will the land be AFAD residential land?
  • Enter the value of a 100% interest in the AFAD land, including chattels. (For example, if the transferee is acquiring 50% of AFAD residential land valued at $750,000, enter $750,000.)

Determining the foreign acquirer's interest

AFAD is imposed only on the foreign acquirer's interest in the land. So, if a foreign acquirer buys property with two other non-foreign parties in equal interests, AFAD will be imposed on the dutiable value of the foreign acquirer's one-third interest in the land.

In OSR Online, the value of the AFAD residential land must be entered as a 100% interest in the property.

Exemptions and concessions

A transaction that is exempt from transfer duty will also be exempt from AFAD.

The first home concession, first home vacant land concession and home concession can still be claimed by a foreign acquirer if they meet the relevant requirements. However, the concession will only apply to the transfer duty component, not the AFAD amount. All concession details must match the client's declaration on their concession claim form.

Find out more about concessions and exemptions for transfer duty.

Endorsing documents

You must stamp the contract of sale once you or the Commissioner has received the full amount of transfer duty, AFAD and unpaid tax interest (if applicable). You do not need to record the AFAD amount separately; so complete the stamp with the full amount.

Transfers assessed as pursuant to the agreement under section 22 of the Duties Act 2001 are stamped with the same endorsement as the contract. Do not enter these transfers into OSR Online separately.

For electronic conveyancing transactions, the transfer will be endorsed electronically with the AFAD amount included.

Non-Australian entity

When a transaction includes real property, each transferor and transferee must declare whether they are a non-Australian entity.

A non-Australian transferor or transferee must complete an identity details annexure.

For transferors, an email is automatically generated through OSR Online when the transaction is lodged, asking the transferor to complete an online identity details annexure. Contact us for help if you cannot obtain the transferor's email address.

Transferees must complete an identity details annexure and you must enter these details in OSR Online.

Forms

Your client must complete one of these forms if they want to claim a concession on the interest in land they are acquiring:

An identity details annexure is required for each non-Australian transferor and transferee where the transaction involves a transfer of real property.

If, after claiming a concession, a person cannot meet their occupancy requirements, they should complete a notice for reassessment of transfer duty - home, first home or vacant land concession (Form D2.4).

If no concession is claimed, the transferee must complete a dutiable transaction statement (Form D2.2).

If AFAD is not applied to a transaction and within 3 years the transferee acquirer becomes a foreign trust or foreign company, they must lodge all documents with the Commissioner for reassessment.

Records you need to keep

For this type of transaction, you must keep:

  • a completed dutiable transaction statement (Form D2.2) - if no concession has been claimed, your client must complete the Form D2.2 and you retain it on file
  • the concession claim form for each applicant (if applicable)
  • evidence of value when only part of the land is used for residential purposes or the transfer is between related parties
  • an identity details annexure for each non-Australian transferee, if the transaction involves real property.

Find out more about your record keeping obligations.

Public rulings

You may find the following public rulings useful when self assessing AFAD residential land:

Also consider...

Contact

Office of State Revenue
For transfer duty self assessment queries:

For queries on payroll tax, land tax and royalties:

  • call 1300 300 734 (Australia) or +61 7 3179 2500 (overseas)
  • send an email using our online enquiry form.