For people buying residential property in Queensland, there are three main transfer duty concessions available. These are:
- the first home concession;
- the first home vacant land concession; and
- the home concession.
All the concessions are generally conditional upon the Buyer:
- living in the property for a period of at least 12 months within a certain time after settlement; and
- not entering into any disposal in respect of the property at any time before that 12 month period expires.
What constitutes a ‘disposal’ is something I want to explore further as any disposal will trigger a reassessment of transfer duty under the Duties Act. A disposal occurs when a Buyer sells or grants a lease or exclusive possession over any part of the property before the 12 month owner occupancy period expires.
But what happens if a property is purchased with a tenant in place? Is it a disposal if the tenant remains for a time until the Buyer moves in? The answer is it depends on when their lease ends under Queensland tenancy law.
Under the Duties Act, concessions are only available if the tenant vacates at the end of their current term or within six months of the settlement date (whichever is earlier). When is the end of their current term? Under tenancy law the ‘current term’ is ultimately determined by the landlord or the tenant, giving the correct period of notice, in the right way.
If you intend to buy a property that has a tenant and you are you worried about your eligibility to receive the concessions, feel free to give us a call.