Costs To Acquire Land
In addition to the purchase price of the land, additional costs in the form of taxes and charges apply. These include:
State and territory governments impose stamp duties at varying rates on certain specified types of documents and transactions. In Queensland, transfer duty is calculated on the dutiable value of a transaction. Generally, this is the greater of the consideration paid for, or the unencumbered value of, the property acquired.
Goods and Services Tax (GST)
GST is levied at a rate of 10 per cent on a taxable supply. Property transferred from a vendor to a purchaser will usually constitute a taxable supply for the purposes of GST, unless an exemption applies. One such exemption is property which is sold as a “going concern”. Leased commercial buildings will usually qualify as going concerns and therefore will not attract GST. Being able to rely on a GST exemption is the best outcome as it will result in no GST being payable on the acquisition, with a consequent reduction in funding and stamp duty costs. However, there are many ways to structure an acquisition of properly and each may produce a different GST outcome, both in respect of GST treatment on the acquisition and GST treatment in respect of a proposed property development. It is important that legal advice is obtained in respect of each transaction at the outset to ensure that the GST position is optimised.
Land tax is assessed on a sliding scale. There are two separate scales, one for individuals (other than trustees or absentees) and one for companies, trustees and absentees.