Queensland Law Society

Budget changes: First Home Owners Grant, land tax, AFAD and more

On 16 June, the Queensland Parliament passed the Revenue Legislation Amendment Bill 2017 as part of the recent Budget. Practitioners should be aware that the legislation introduces a range of changes, most of which will commence on assent except as noted below:

  • The First Home Owners Grant has been extended. The temporary increase to the amount of the grant (from $15,000 to $20,000) will be extended for a further six months, until 31 December 2017.
  • The Land Tax Act 2010 has been amended to:
    • introduce an ‘absentee surcharge’ – from the 2017-2018 financial year onwards, a 1.5% surcharge will be imposed on individuals not ordinarily residing in Australia (absentees) who are liable for land tax in Queensland
    • clarify that, in relation to the assessment of land tax on trust land held by joint trustees, the Office of State Revenue’s long-standing practice will apply so that, if trust land is held by more than one trustee, it is to be assessed as if it is owned by one person and that the provisions relating to assessment of co-owned land do not apply
    • retrospectively restore a prohibition on landlords passing on the cost of land tax to tenants under commercial leases entered into after 1 January 1992 and before 30 June 2009 (reversing the effect of Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225). The amendments preserve a prohibition on lessors recovering land tax on pre-existing leases from 30 June 2010.
  • Amendments to the additional foreign acquirer duty (AFAD) provisions in the Duties Act 2001 have been introduced, with the result that:
    • When certain chattels that are integral to the use and occupation of the AFAD land are acquired in conjunction with an acquisition of AFAD residential land, the dutiable value for the transaction will include the value of the chattels. The explanatory notes give the following examples: “For example, chattels such as household furniture, fittings, appliances, recreational equipment, barbecue settings, swimming pool cleaning equipment and mobile air conditioners would be included. However, it would not include cars, boats, caravans, trucks, farming equipment and chattels used for commercial purposes.”
    • AFAD is confirmed to apply to certain agency transactions for AFAD residential land, when the agreement for the transfer of dutiable property is entered into by an agent for a foreign person.
    • AFAD is confirmed to apply to certain pre-incorporation contracts if the intended ultimate transferee is a foreign corporation.