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Additional Foreign Acquirer Duty

In the 2016 Queensland State Budget the Treasurer announced an intention to amend the Duties Act 2001 (QLD) to introduce additional transfer duty to foreign acquirers, to be known as Additional Foreign Acquirer Duty (“AFAD”). This new duty commences 1 October 2016. What is AFAD? AFAD is an extra amount of duty that applies to […]

Additional Foreign Acquirer Duty

Additional Foreign Acquirer Duty

By Aylward Game - Oct 3, 2016 Employment Law

In the 2016 Queensland State Budget the Treasurer announced an intention to amend the Duties Act 2001 (QLD) to introduce additional transfer duty to foreign acquirers, to be known as Additional Foreign Acquirer Duty (“AFAD”). This new duty commences 1 October 2016.

What is AFAD?

AFAD is an extra amount of duty that applies to transactions that are liable for transfer duty, landholder duty or corporate trustee duty under the provisions of the Duties Act 2001, when foreign purchasers acquire certain residential land.

Circumstances triggering AFAD

AFAD will apply if:
  • The purchaser is a foreign person;
  • The transaction involves AFAD residential land; and
  • The liability for duty on your transaction arises on or after the 1 October 2016.

AFAD residential land

AFAD residential land is land in Queensland that is, or will be, used solely or primarily for residential purposes where certain conditions are met. AFAD residential land includes:

  • Homes and apartments;
  • Vacant land which a home or apartment will be built;
  • Land for residential development such as:
    • Smaller unit blocks
    • Housing and subdivisions
    • Major developments with a residential component
  • Buildings refurbished, renovated or extended for residential use.

Residential properties such as retirement villages and students accommodation will be considered on a case-by-case basis.

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Land used for hotels and motels is not AFAD residential land.

Who is a foreign person for AFAD purposes?

Foreign persons for AFAD purposes are:
  • Foreign individuals – being individuals that are not Australian citizens or permanent residents
  • Foreign corporations – being corporations that are incorporated outside Australia with foreign persons (or related persons of foreign persons) having a controlling interest of at least 50%
  • Foreign trusts – being trusts where at least 50% of their interests are trust interests of:
    • Foreign Individuals
    • Foreign corporations
    • Foreign trustees
    • Related persons of any of the above, including partners in a partnership.

Concessions and Exemptions

Transfer duty concessions for your home, first home, or first home vacant land and family business do not apply to AFAD.

Rate of AFAD

AFAD applies as additional duty on top of the usual transaction duty at a rate of 3% of the dutiable value of the AFAD residential land.

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