Property tax changes announced in Qld Budget FY25 (2024)

The Revenue and Other Legislation Amendment Bill 2024 introduced on 11 June 2024 gives effect to these announcements. The key aspects of the Bill are summarised below.

Increase to duty thresholds for first home purchases entered into from 9 June 2024

The threshold ceiling for the concession on transfer duty will lift from $500,000 to $700,000 and will phase out for properties over $800,000. This means a first home owner will pay no stamp duty for a property up to $700,000and reduced stamp duty for properties up to $800,000.

The changes to the threshold ceiling will also apply to vacant land, with the threshold increasing from $250,000 to $350,000. It will then phase out up to values of $500,000.

The new concession thresholds will apply to contracts entered into on or after 9 June 2024, unless the contract is:

• replacing a transfer or agreement to transfer that was made prior to 9 June 2024

It will not be possible to rescind an existing agreement and enter a new agreement for the same property after 9 June and claim the new concession.

• a contract formed on exercise of an option, where the option was entered into prior to 9 June 2024

Any contracts formed upon exercise of existing options will be subject to duty at the previous rate

• another arrangement was made before 9 June 2024 the sole or main purpose of which was to defer the making of the transfer or agreement until 9 June 2024 or later so the new concession provisions would apply in relation to the transaction.

This is a broad provision designed to catch any arrangement to postpone the entry into an agreement until after 9 June 2024 where the purpose was to claim the new concession

Increase to additional duty and land tax for foreign owners

Contracts for the acquisition of property entered into on or after 1 July 2024 will be subject to an increased rate of AFAD. The rate will increase from 7% to 8%.

Similarly, the Foreign Land Tax Surcharge will increase from 2% to 3%. This amendment commences on 30 June 2024 so will apply to.

First Home Owner Grant (FHOG) – $30,000 land owned on 30 June 2024

An increase to the FHOG previously given effect via an administrative arrangement (Public Ruling FHOGA000.2.1 – Administrative arrangement – increase to amount of first home owner grant) is given statutory effect by a retrospective amendment to the First Home Owner Grant Act 2000 (Qld). The amount of the FHOG was increased to $30,000 from 20 November 2023 for eligible transactions, which are:

• contracts for the purchase of a new home in Queensland, made between 20 November 2023 and 30 June 2025 (both dates inclusive); or
• a comprehensive home building contract made by the owner of land in Queensland, or a person who will on completion of the contract be the owner of land in Queensland, to have a new home built on the land, if the contract is made between 20 November 2023 and 30 June 2025 (both dates inclusive); or
• the building of a new home in Queensland by an owner builder if the building work starts between 20 November 2023 and 30 June 2025 (both dates inclusive).

A transaction is not an eligible transaction if the Commissioner is satisfied the relevant contract forms part of a scheme to circumvent limitations on, or requirements affecting, eligibility or entitlement to the increased FHOG amount. The Commissioner must presume the existence of a scheme in certain circ*mstances (eg, where an applicant enters into a replacement contract on or after 20 November 2023).

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