Queensland Government’s Additional Foreign Acquirer Duty

How does the Additional Foreign Acquirer Duty work?

The Additional Foreign Acquirer Duty (AFAD) works as a state government-levied charge to foreign individuals purchasing land or homes in Australia. It is administered to ensure that non-residents and non-citizens residing in Australia who acquire residential property are contributing to government services and infrastructure they may benefit from, in the same way local property and land buyers do.

Examples of how the Additional Foreign Acquirer Duty works

Below are three examples of how the Additional Foreign Acquirer Duty works in practice.

Scenario 1: Aroha

Aroha has signed a contract to buy a vacant block of land in Cairns. She intends to build a house on the land, to be used as her primary place of residence. Aroha is a New Zealand citizen who has been ordinarily resident in Australia for two years on a special category visa. Thanks to her visa, she is not considered a foreign individual for the purposes of the Additional Foreign Acquirer Duty, and will not be required to pay anything.

Scenario 2: Sam

Sam bought a house on the Sunshine Coast in October 2024 for $830,000. Sam is a British citizen who has recently become a permanent resident of Australia. At the time he purchased his house, Sam was a temporary resident and was therefore considered a foreign person for the purposes of the Additional Foreign Acquirer Duty. This is because AFAD will continue to apply to the transaction even if an individual's foreign status changes at a later date. Due to the date of purchase, the taxable amount is 8% and therefore Sam was charged $66,400.

Scenario 3: Sophia

Sophia purchased a townhouse in Toowoomba in May 2024 for $495,000. Sophia is a Greek citizen and studying at university on a student visa. As she is not an Australian permanent resident or citizen, she will be charged Additional Foreign Acquirer Duty on the purchase. Due to the date of the purchase, she is charged 7% on the price of the townhouse and was liable to pay $34,650.

How is residential land for the purposes of the Additional Foreign Acquirer Duty defined?

Residential land for the purposes of the Additional Foreign Acquirer Duty is charged on land that will be used primarily for residential purposes, where certain conditions are also met.

It is charged on:

• Homes, apartments and chattels
• Vacant land on which a home will be built
• Land for residential development including smaller unit blocks, housing subdivisions and major developments that include residential components
• Buildings that have been renovated, extended or refurbished for residential use

Who is classed as a foreign person for the purposes of the Additional Foreign Acquirer Duty?

Whether you, your company or your trust are considered a foreign person is dependent on several factors.

Foreign individuals

You are a foreign individual if you are not an Australian citizen or a permanent resident in Australia (including New Zealand citizens with special category visas). Individuals holding a temporary subclass of a two-part visa that will ultimate lead to permanent resident status – for example 820 or 309 Partner Visa holders – are classified as foreign individuals for the purpose of the Additional Foreign Acquirer Duty. New Zealand citizens residing in New Zealand who do not hold a special category visa are also classified as foreign individuals.

Foreign corporations

A foreign corporation for the purpose of the Additional Foreign Acquirer Duty is one that is incorporated outside of Australia, or one in which a foreign person has a controlling interest of 50% or more.

Trustees of a foreign trust

A trust is considered foreign for the purpose of the Additional Foreign Acquirer Duty if at least half of its interests are trust interest of foreign individuals, foreign corporations, trustees of a foreign trust or related persons of any of the former.

How is the Additional Foreign Acquirer Duty calculated?

Additional Foreign Acquirer Duty is calculated based on the foreign acquirer’s interest of the dutiable value of the AFAD residential land. 

The following rates apply:

The value of any chattels acquired as part of the transaction is also included in the dutiable amount.

Are there exemptions to the Additional Foreign Acquirer Duty?

There is only one circumstance in which a foreign individual may purchase a property in Queensland and not be subject to the Additional Foreign Acquirer Duty.

Retirement visa holders

Individuals who are classified as specified foreign retirees can be exempt if their principal place of residence was purchased on or after 1 January, 2023.

In order to qualify for the AFAD exemption, an individual must not:

• Sell or transfer part or all of their property before they move into it
• Sell or transfer part or all of their property within 12 months of moving in
• Lease or give exclusive possession of the property before they move into it
• Lease or give exclusive possession of the property within 12 months of moving in (unless the arrangement started between 10 September 2024 and 5 December 2024)

Foreign stamp duty in Queensland

Paying stamp duty in Queensland is not linked to an individual's status as either a citizen, permanent resident or foreign individual. 

If the transaction is liable for stamp duty - also called transfer duty - then AFAD comes in addition to that payment. 

Understanding how stamp duty in Queensland works is the first step to working out your overall costs.