RESIDENCY STATUS AND THE IMPACT ON YOUR PURCHASING PROPERTY IN QUEENSLAND
In Queensland, the total fees you will pay the government for the purchase of a property will depend on your residency status. In particular, your status will affect whether you are subject to:
- Additional Foreign Acquirer Duty (“AFAD”); and/or
- Foreign Investment Review Board (“FIRB”) approval.
AFAD is an additional transfer duty payment, charged at 7%* of the purchase price and payable at the same time as the standard transfer duty payment.
* Please note that for contracts signed on or after 1 July 2024, AFAD will increase to 8% of the purchase price.
FIRB approval is required where a temporary resident or foreign investor wishes to invest or buy residential land in Australia. You should apply for this prior to signing a contract or include a special condition making your contract subject to FIRB approval.
Further details can be found here: https://www.maplawyers.com.au/what-is-foreign-investment-review-board-approval/
Please note that MAP Lawyers does not assist with FIRB applications – we recommend you contact a migration lawyer.
Below is a summary of the fees payable depending on your residency status:
| AFAD | FIRB |
Australian citizen | No | No |
Australian permanent resident | No | No |
New Zealand citizen living in Australia | No | No |
New Zealand citizen living in New Zealand | Yes | No |
Temporary resident | Yes | Yes |
Foreign resident | Yes | Yes |
Australian citizens / permanent residents
As an Australian citizen or a permanent resident in Australia, you will pay the standard rate of transfer duty, subject to any first home, home, or first home vacant land concession you may be eligible for.
A link to the transfer duty estimator can be found here: https://www.qld.gov.au/housing/buying-owning-home/advice-buying-home/transfer-duty/how-much-you-will-pay/calculating-transfer-duty/estimate-transfer-duty
You will not be subject to AFAD or FIRB approval.
New Zealand citizens
As a New Zealand citizen, if you are residing in Australia at the time of signing the contract (provided you have not entered Australia purely for the purpose of signing the contract), you will pay the standard rate of transfer duty, subject to any first home, home, or first home vacant land concession you may be eligible for.
A link to the transfer duty estimator can be found here: https://www.qld.gov.au/housing/buying-owning-home/advice-buying-home/transfer-duty/how-much-you-will-pay/calculating-transfer-duty/estimate-transfer-duty
However, if you are living outside of Australia at the same of signing the contract, you will be subject to AFAD.
You will not be subject to FIRB approval.
Temporary / foreign residents
As a temporary or foreign resident, you will be liable for both AFAD and FIRB approval.
You will continue to be liable for AFAD even if you become a permanent resident between signing the contract and settling.
Case study
Where you are purchasing as a temporary / foreign resident, it can be worthwhile considering who you list on the contract as the buyer, as different scenarios will result in different fees.
Example:
Michael and Clare are looking to purchase a property in Queensland for $800,000.00. They will be living in the property as their principal place of residence (so are eligible for the home transfer duty concession). Michael is an Australian citizen. Clare is a temporary resident.
Option 1 – Buy the property as Joint Tenants (50/50 split)
FIRB Approval | Nil Exemption applies if you purchase as Joint Tenants with a spouse who is an Australian citizen, a New Zealand citizen or a holder of an Australian permanent visa |
Transfer duty payable (home concession) | $21,850.00 |
Additional Foreign Acquirer Duty (this is only charged on Clare’s 50%) | $28,000.00 |
TOTAL | $49,850.00 |
Option 2 – Buy the property as Tenants in Common (e.g. 90% to Michael and 10% to Clare)
FIRB Approval
This fee will depend on the purchase price | $13,200.00 Exemption does not apply as Michael and Clare will not hold the property as Joint Tenants |
Transfer duty payable (home concession) | $21,850.00 |
Additional Foreign Acquirer Duty (this is only charged on Clare’s 10%) | $5,600.00 |
TOTAL | $40,650.00 |
Option 3 – Buy the property in Michael’s name only
FIRB Approval | Nil Not applicable as Michael is an Australian citizen |
Transfer duty payable (home concession) | $21,850.00 |
Additional Foreign Acquirer Duty | Nil Not applicable as Michael is an Australian citizen |
TOTAL | $21,850.00 |
* Please note registration fees have been excluded from these calculations.
** Figures based on fees/rates current as at 23 May 2023 .
As the above shows, fees will vary considerably depending on who is listed on the contract. It is important to factor these costs in before signing a contract.
You should also speak with your broker / banker before signing a contract to ensure there will be no issues in submitting a finance application with the proposed buyer.
