On 20 October 2015 the Queensland Court of Appeal, in the case of Commissioner of State Revenue v Di Sipio & Anor [2015] QCA 198, held that a couple purchasing their first home had not disposed of the land merely because it was purchased subject to a pre-existing lease which had longer than six months until its expiry.
Accordingly, the Court held that allowing the existing tenants to continue leasing the property until the expiry of the lease did not preclude the new Buyer’s entitlement to the first home owner’s duty concession.
The decision was a reversal of the Office of State Revenue’s long-held interpretation and practice pertaining to the concession.
On 9 December 2016, the Revenue and Other Legislation Amendment Bill 2016 received Royal Assent. The passing of the Bill brought into effect changes which subsequently reversed the decision of the Queensland Court of Appeal, and reinstated the previous interpretation and practice pertaining to purchasing properties subject to pre-existing leases.
As a result of the Bill, a Buyer of land is considered to dispose of the land if they purchase it subject to a pre-existing lease.
Despite this, Buyers will still be eligible for the first home owner’s duty concession if:
- they occupy the residence within one year after the transfer date of the property; and
- the existing tenant vacates the property the earlier of:
- the termination of the current term of the lease; or
- within six months after the transfer date.
If you have any queries regarding the above, please do not hesitate to contact us at Big Law Solicitors on (07) 3482 6999 or email us at mail@biglaw.com.au.
