Related Party Transfers

Many and varied situations arise where family members or related parties decide to transfer property to one another.

When transfers are between "related parties", the following matters need to be taken into consideration:

  1. Whether the property is being gifted or monetary consideration is being paid;

  2. If the property is being purchased, and is it at current market value?

  3. Has the 'seller/gifting party' spoken to their accountant about any potential capital gains tax issues or pension implications of the transfer?

Often, what parties do not realise is that:

  • A property valuation that meets the Office of State Revenue's requirements is required for interrelated party transfers;

  • Unless an exemption or concession applies, stamp duty will be payable on the transfer;

  • There are stamp duty exemptions with respect to rural/farming land provided the requirements of the Duties Act 2001 QLD are satisfied; and

  • If you are purchasing a property for less than its market value, stamp duty will be payable on the valuation, rather the consideration being paid.

Concessions for stamp duty may still apply if the person acquiring the property is a first home owner or they are going to reside in the property as their principal place of residence.

Title Registration fees will also still be payable by the acquirer.

We recommend that REIQ contracts are not used for related party transfers and that the contract or deed is drafted to fit the particular circumstance. Transferring land between related parties can be a costly and complex process if it is not handled correctly so it is always advisable to seek legal advice, prior to commencing the transfer process.

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