Last month the Premier of Queensland announced that Cabinet had agreed to reinstate the Principal Place of Residence Concession (PPR) for all eligible
purchasers from 1 July 2012.
The previous rates of transfer duty came into force on 1 August 2011 with a small decrease in the transfer duty rate and the removal of the Principal Place of Residence Concession. The Office of State Revenue (OSR) then introduced the Queensland Building Boost of $10,000.00 for purchasers of a newly built or extensively renovated homes in Queensland. The Queensland Building Boost ceased on 30 April 2012.
The announcement from the Queensland Cabinet to reinstate the PPR Concession is good news for house hunters who have previously owned property in
Queensland. For eligible purchasers, this reinstatement will equate to, on average, a $7,000.00 reduction in transfer duty liability on contracts formed after 1 July, 2012.
For example, on a purchase of a property worth $520,000.00 that is to be the purchaser’s PPR after 1 July, 2012, a purchaser will have a stamp duty liability of approximately $9,450.00 whereas the same purchaser of the same property would have transfer duty liability of approximately $16,625.00 prior to 1 July, 2012.
The announcement of this reinstatement of the PPR concession has prompted many purchasers with contracts before 1 July, 2012 to delay the forming
of the contract until after 1 July 2012. The Office of State Revenue is conscious of this problem and has set out extensive eligibility criteria in relation to the PPR concession after 1 July, 2012.
By way of summary, the following contracts will not be eligible for the Home Concession:-
- Contracts formed prior to 1 July, 2012 but settling after 1 July, 2012;
- Any legally binding document made prior to 1 July, 2012 that has the purpose of deferring the making of a contract until after 1 July, 2012 so that the PPR concession will apply;
- A contract made after 1 July, 2012 that replaces a contract made prior to 1 July, 2012 for the purpose of obtaining the PPR concession; and,
- An Option Deed (Put and Call Agreement) that is entered prior to 1 July, 2012 for the purposes of entering into a contract for the purchase of the home to be exercised after 1 July, 2012.
As such, only new contracts entered into on or after 1 July, 2012 where purchasers are to reside in the property as their principal place of residence, are entitled to claim the reinstated PPR concession on their transfer duty.
If you have any questions or queries in relation to the reinstatement of the PPR concession, please do not hesitate to contact one of our experienced members of staff.
