Transfer Duty on Purchase of Business
When you agree to buy a business in Queensland, you may need to pay transfer duty on the transaction. Transfer duty is a state tax calculated on the dutiable value of the business assets or the agreed consideration, including GST if payable. Understanding how transfer duty works helps you plan your purchase costs and avoid unexpected tax liabilities
To calculate transfer duty when you enter into an agreement to transfer business assets, apply the Transfer Duty Rates (see table below) to the dutiable value of the agreement – the greater of the value of the business assets or the consideration paid. If GST is payable, duty must be calculated on the GST-inclusive amount.
Table: Transfer Duty Rates
| Dutiable value | Duty rate |
|---|---|
| Not more than $5,000 | Nil |
| More than $5,000 up to $75,000 | $1.50 for each $100, or part of $100, over $5,000 |
| $75,000 to $540,000 | $1,050 plus $3.50 for each $100, or part of $100, over $75,000 |
| $540,000 to $1,000,000 | $17,325 plus $4.50 for each $100, or part of $100, over $540,000 |
| More than $1,000,000 | $38,025 plus $5.75 for each $100, or part of $100, over $1,000,000 |
For more information on Transfer Duty Rates and Exemptions, please refer to the QLD Government website, click HERE).
FAQ
Who Pays Transfer Duty When You Buy a Business in Queensland?
When buying a business in Queensland, the buyer usually pays transfer duty. This tax applies to the dutiable value of the business assets or property included in the sale. However, the contract can sometimes specify otherwise, so it’s important to review the terms carefully.
Additionally, buyers should consult their accountant or legal advisor to confirm their obligations and avoid unexpected costs. By planning ahead, you can ensure that transfer duty is accounted for in your purchase budget and avoid surprises at settlement.
When do I need to pay transfer duty on a business purchase in Queensland?
You usually pay transfer duty when you enter into an agreement that includes dutiable business assets or property interests.
How is transfer duty calculated on a business purchase?
Transfer duty is based on the dutiable value — the higher of the value of the business assets, or the consideration paid, including GST if applicable.
Example:
Total Purchase Price (including Stock and Plant and Equipment) = $500,000 (therefore, this falls into the category “$75,000 to $540,000”:
Calculation: $500,000 – $75,000 = $425,000/100 x $3.50 = $14,875 + $1,050 = $15,925
Are there any exemptions from transfer duty?
Some exemptions and concessions may apply depending on the structure of the purchase and the type of assets involved. Refer to QLD Revenue Office guidance for specifics.