The Revenue and Other Legislation Amendment Bill 2016 was introduced to Parliament on 16 June 2016 (the Bill).

In April, we published an article about a Court of Appeal decision made in October last year in the case of Commissioner of State Revenue v Di Sipio & Anor [2015] QCA 198. A link to that article can be found here.

In that case, the Court of Appeal held that a first home buying couple had not “disposed” of their property merely by virtue of allowing existing tenants to continue leasing their property for longer than six (6) months after the settlement date and were therefore entitled to retain their first home owners’ duty concession.

This decision was a reversal of long held Office of State Revenue interpretation and policy that unless an existing tenant had moved out within six months of settlement, a first home buyer who had claimed the first home buyer’s transfer duty concession would become liable to pay duty at the non-concessional rate.

The purpose of the Bill (among other matters) is to reinstate the previous interpretation and practice of the Office of State Revenue.

The Bill will insert a specific new definition of “disposal” at section 154(2) of the Duties Act 2001 to clearly state that a transferee of land (i.e. a buyer) disposes of land if the transferee acquires land subject to a lease granted before the transfer date over all or part of the land. The new section 154(2) will not apply if the occupier of the land before the transfer date (i.e. the tenant) vacates the land on the termination of the current term of the lease, or within 6 months after the transfer date, whichever is the earlier (pursuant to proposed new section 154(2AA)).

If passed, the Bill will completely reverse the effect of the Court of Appeal decision in Commissioner of State Revenue v Di Sipio & Anor [2015] QCA 198.

The Office of State Revenue may then safely continue to use its’ explanation of ‘disposal’ given the published ‘Guide to claiming a home or first home transfer duty concession’ which informs home buyers that “You will need to make appropriate arrangements to ensure existing tenants vacate the property within 6 months of the transfer date.”