From 1 July 2016, changes to the Duties Act 2001 (Qld) (“the Duties Act”) have expanded the existing family farm stamp duty concessions available for transfers of property on which a business of primary production is conducted, between relatives.
Prior to the most recent changes, the Duties Act did provide that a stamp duty concession was available for transfers of property on which a business of primary production is conducted, between relatives.
The previous requirements for this concession were:-
- a transferor being a defined relative of a transferee (which is a broad category of people including a person’s spouse, parent, grandparent, brother, sister, nephew or nice, child or grandchild, aunt or uncle);
- transferred a parcel of land on which a primary production business (being defined as agriculture, pasturage, or dairy farming) had been carried out;
- to a transferee who intended to continue carrying on the primary production business on the land; and,
- the transfer was a gift and no consideration was paid;
then the transferee was not required to pay stamp duty on the transaction.
The most challenging issue for transferors with the previous concession provisions was the gifting requirement. The availability of the concession was limited for most family farm succession planning because most of these transactions involved payment of consideration by the transferees in some form.
As part of the recent changes, the gifting requirement has been removed from the relevant section of the Duties Act and the concession is now available to the transfer of business property including land primarily used to carry on a primary production business where:-
- The party directing the transfer (the transferor) is a defined relative of the transferee;
- The transferee is transferred the property in their personal capacity;
- The business of primary production is carried on by the defined relative, either alone or with others; and,
- The transferee intends on carrying on the business of primary production, either alone or with others.
If the above requirements are satisfied, the Duties Act provides, at Section 105, that regardless of the consideration paid between the parties (for the purposes of calculating stamp duty liability) the dutiable value will be taken to be nil.
In addition to this, if there is residential land adjacent to the business property being used for primary production, then the dutiable value of the residential land shall also be taken to be nil.
If you require any further information in relation to the changes to the family farm stamp duty concessions please contact one of our experienced members of staff for further advice.