New right acquisition - option agreements procedure

Follow this procedure to help you lodge a grant of a new option to acquire dutiable property using OSRconnect.

If the transaction is for the transfer of an existing option, refer to the transfer of an existing right procedure.

Section 23(2) of the Duties Act 2001 allows a credit for the duty paid on an option, where the option agreement states the consideration paid will be part of the consideration for the subsequent transaction when the property is acquired.

Use our option agreements toolkit for more information.

Note: The fields marked with an asterisk (*) are mandatory.

On the Lodgement Obligations tab:

  1. Select Transfer Duty from the Create return/transaction drop-down list.
  2. Select Create to start the transaction.
  1. You can enter your own reference (optional).
  2. Select Acquisition of New Right as the Transaction Class.
  3. Select Acquisition of new Right as the Type of dutiable transaction.
  4. Select Land in Queensland as the Type of dutiable property.
  5. Select or enter the Transaction/Document date using the calendar or text field (dd/mm/yyyy).
  6. Enter the Unconditional date - the date when the last allowable contract condition was satisfied (if applicable).
    Read the public ruling on extension of time to lodge an agreement (DA019.1) for more information.
  7. Answer the question: Is there an agreement in writing?
    The answer is generally Yes for an option agreement.
  8. Note if a transfer (assessable under section 22) accompanies the transaction.
    The answer will generally be No for an option agreement.

A transfer under section 22 will only accompany an agreement after the option is exercised.

  1. Note if duty has been previously paid on this agreement.
    The answer will generally be No for a new option agreement.
  2. Click Next.

The Property section will display first. Make sure you complete this stage following our data entry standards.

  1. Enter ‘Option agreement’ in the Detailed description of the property field.
  2. For options to acquire real property:
    • Enter the lot number in the Lot from field.
    • Select the Plan type from the drop-down list.
    • Enter the Plan number in the field.
  3. Click Add to register the details.
  4. Select Transferors from the Document details list.

The grantor of an option is the transferor.

  1. Select the Transferor type from the drop-down list.
  2. Enter the transferor details.
  3. Click Add to register the details.

To add more transferors, repeat steps 17 to 19.

  1. Select the Transferees from the Document details list.

The grantee of an option is the transferee.

  1. Answer the question: Are any of the transferor/s and transferee/s related?
  2. Select the Transferee type from the drop-down list.
  3. Enter the transferee name details.

You will need to enter an ABN or ACN for a company, and a date of birth for an individual.

  1. Enter the Interest acquired by the transferee as a fraction.
  2. Complete the transferee contact details.
  3. Click Add to register the details.

To add more transferees, repeat steps 22 to 26.

  1. Click Next.
  1. Answer the question: Is the consideration less than the unencumbered value of the property included in this transaction?
    The answer is generally No for an option.

Evidence of value is generally not required for an option agreement.

  1. Enter the consideration paid for the option in the Consideration / Unencumbered value of ENTIRE property field.
  2. Answer the question: Is an exemption being claimed?
    The answer is generally No for an option.
  3. Answer the question: Does this transaction form part of an arrangement that includes other dutiable transactions (Section 30)?
    If Yes, complete the remaining questions.
  4. Click Next.

The amount of duty payable is displayed, with interest (if applicable).

  1. Click Save to validate the data entered.
    The status message advises of any errors in the form.

A transaction number is created, and the transaction is saved in draft. (The transaction number will be displayed in a pop-up box that you can then close by clicking the X button.)

  1. Click Summary.
  2. Click Print for a hard copy.
  3. Click the X to close the summary.
  4. Click Next to go to the Submit stage.
  5. Enter your full Name and contact details.
  6. Check the box to complete your acknowledgement.
  7. Click either:
    • Submit to lodge this transaction - you can then view this in Payment Obligations.
    • Save to save this transaction (click the X to close) - you can then view this in Lodgement Obligations.

You must lodge (submit) the transaction within 30 days of the liability date to avoid unpaid tax interest (UTI). Transactions with a liability amount owing must be paid within 14 days of being lodged.

If UTI is owed at the time of lodgement, it will continue to accrue until the outstanding amount is paid.

  1. Start a new transaction and complete the details in the Identification stage.
  2. Complete all mandatory fields in Document details.
  3. Click Next to go to Transaction details.
  4. Answer the question: Is the consideration less than the unencumbered value?
  5. Enter the Consideration / Unencumbered value of the property.
    This is generally the consideration paid.
  6. Answer the question: Is an exemption being claimed?
  7. Answer the question: Does this transaction form part of an arrangement that includes other dutiable transactions (Section 30)?
    If Yes, complete the remaining questions.
  8. Click Next to go to the Liabilities stage.
  9. Enter the duty paid on the option agreement in the Less duty payable on previous option agreement field.
  10. Enter the Transaction number for the previous option agreement.

The total duty will be calculated once the form is saved.

  1. Click Save to validate the data entered.
    The status message advises of any errors in the form.

A transaction number is created, and the transaction is saved in draft. (The transaction number will be displayed in a pop-up box that you can then close by clicking the X button.)

The total duty payable for this transaction is displayed and reflects the credit for the duty paid or payable on the previous option agreement.

Image of a duty paid option agreement in OSRconnect

  1. Click Next to go to the Submit stage.
  2. Enter your full Name and contact details.
  3. Check the box to complete your acknowledgement.
  4. Click either:
    • Submit to lodge this transaction - you can then view this in Payment Obligations.
    • Save to save this transaction (click the X to close) - you can then view this in Lodgement Obligations.

You must lodge (submit) the transaction within 30 days of the liability date to avoid UTI. Transactions with a liability amount owing must be paid within 14 days of being lodged.

If UTI is owed at the time of lodgement, it will continue to accrue until the outstanding amount is paid.