In response to concerns raised regarding AFAD and comparisons between QLD and NSW, we have been advised the following:
The Duties Act 2001 (the Act) imposes AFAD at a rate of 7 per cent of the property value where a foreign person acquires certain residential land in Queensland. Under the Act, AFAD is intended to apply to any individual who is not an Australian citizen or permanent resident. A permanent resident means a person who holds a permanent visa, or a New Zealand citizen who holds a special category visa, as defined by the Migration Act 1958 (Commonwealth).
Retirement visa holders (subclass 405 and 410) and all other temporary visa holders are considered foreign persons and are required to pay AFAD when they acquire residential land in Queensland.
NSW only provides a limited exemption from its surcharge purchaser duty where the property will be the retirement visa holder’s home and they live in the home continuously for at least 200 days within 12 months from the transaction date. This means eligibility for the exemption could be removed if they were to leave Australia within the first 12 months of purchasing the property. Further, they will still have to pay the surcharge on residential investment properties.
Queensland’s AFAD provisions are fundamentally different from the surcharge purchaser duty provisions in NSW and are also more certain for individuals.
There are a number of other temporary visa categories that allow extended stay in Australia. Providing an exemption from AFAD for retirement visa holders would invite submissions from other longer-term visa holders for the same consideration to be given to them.
While there are no current plans to exempt retirement visa holders from AFAD, they may be eligible for the transfer duty home concession on any home purchase. Queensland residents who acquire and occupy a home as their principal place of residence are entitled to a concessional rate on their standard rate of duty, which does not include the AFAD component, resulting in savings of up to $7,175. Further information is available at www.qld.gov.au/housing/buying-owning-home/home-concession.
Subclass 405 and 410 visas are closed to new applications. The Australian Government announced a pathway to permanent residence for eligible retirement visa holders as part of its 2018-19 Budget and you can read more at https://immi.homeaffairs.gov.au/visas/permanent-resident/visa-options/retirement-visa-pathway