If you’ve found your perfect new QLD home or investment property, and it has a ‘sitting tenant’ (meaning there is currently a tenant/s residing there who will be staying there when the property becomes yours) – you may be wondering how this may affect the amount of stamp duty (transfer duty) you’ll be required to pay at settlement.
Well it depends on your scenario…
A. You are happy to keep the tenant in the property and have no intention of moving in (buying as an investment property):
Investment property purchases in QLD are not eligible for a concession and you will have to pay the full rate of stamp duty.
B. You want to move into the property as your principal place of residence right away!
If your tenant is not on a fixed lease, you can issue a Notice To Leave (Form 12)^ to vacate the tenant within 6 months of settlement and move in yourself once they leave. In order to claim the Home Concession rate of stamp duty, you must stop receiving rental monies with 6 months of settlement, you must move in within 12 months of settlement and stay in the property as your principal place of residence for 12 consecutive months.
If your tenant is on a fixed lease that is ending within 6 months of settlement, you can issue a Notice To Leave (Form 12)^ and move in once they leave. In order to claim the Home Concession rate of stamp duty, you must stop receiving rental monies with 6 months of settlement you must move in within 12 months of settlement and stay in the property as your principal place of residence for 12 consecutive months.
If your tenant is on a fixed lease that ends more than 6 months after settlement, you may not be able to claim Home Concession and will have to pay with full rate of stamp duty, unless you can negotiate with the tenant to end their lease within the 6 months after settlement. If they are agreeable, then in order to claim the Home Concession rate of stamp duty, you must stop receiving rental monies with 6 months of settlement, you must move in within 12 months of settlement and stay in the property as your principal place of residence for 12 consecutive months.
C. You are happy to keep the tenant in the property, but plan to eventually move into the property as your principal place of residence:
If your tenant is not on a fixed lease, you can issue a Notice To Leave (Form 12)^ to vacate the tenant within 6 months of settlement and move in yourself once they leave. In order to claim the Home Concession rate of stamp duty, you must stop receiving rental monies with 6 months of settlement, you must move in within 12 months of settlement and stay in the property as your principal place of residence for 12 consecutive months.
If your tenant is on a fixed lease and that is ending within 6 months of settlement, you can issue a Notice To Leave (Form 12)^ and move in once they leave. In order to claim the Home Concession rate of stamp duty, you must stop receiving rental monies with 6 months of settlement, you must move in within 12 months of settlement and stay in the property as your principal place of residence for 12 consecutive months. You also cannot commence a new lease with the tenant if wishing to qualify for the Home Concession stamp duty rate.
If your tenant is on a fixed lease that ends more than 6 months after settlement, or if you want to keep them in longer than 6 months after settlement, you may not be able to claim Home Concession and will have to pay with full rate of stamp duty, unless you can negotiate with the tenant to end their lease within the 6 months after settlement. If they are agreeable, then in order to claim the Home Concession rate of stamp duty, you must stop receiving rental monies with 6 months of settlement, you must move in within 12 months of settlement and stay in the property as your principal place of residence for 12 consecutive months.
Other info:
*First home buyer? In all of the above scenarios where you are eligible to claim the Home Concession, if this is your first home, you may be eligible for an even larger stamp duty concession – the First Home Concession. There are a few conditions to claim this though, including the property must be costing under $550,000. Read here for more details >
**International buyer? Stamp duty concessions are available to you as above, however you will need to pay Additional Foreigner Acquire Duty (AFAD). Read here for more details.
^Notice To Leave (Form 12) needs to be served within relevant notice periods. See here for details.
If you’re buying a tenanted property and seeking legal advice, phone Sempre Vero Lawyers on (07) 5576 6009 to speak with a solicitor today.
Helpful links:
https://www.rta.qld.gov.au/forms-resources/forms/forms-for-general-tenancies/notice-to-leave-form-12
https://www.qld.gov.au/housing/buying-owning-home/advice-buying-home/transfer-duty/how-much-you-will-pay/concessions-on-transfer-duty/concessions-for-homes/home-concession
