Auctioning commercial, rural and development land in Queensland

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Most of what Queenslanders know about auctions comes from Saturday mornings in the suburbs: a front lawn, a few dozen neighbours and a family home. Yet the same rostrum also sells warehouses, grazing country, cane farms, corner shops and englobo parcels waiting for a subdivision approval. The call sounds much the same. The legal ground under it does not.

For an auctioneer, the shift from a house to a commercial, rural or development lot changes which rules bite, how a bid is worded, what the buyer must have in hand before the hammer falls and which contract governs what happens next. Some of the protections built for home buyers fall away; other obligations, such as seller disclosure and GST paperwork, become heavier. This guide follows those differences in the order an auctioneer meets them, from the definitions to the tax inside the bid, land not yet on its own title, and the tenders that compete with auction.

Australian Taxation Office guidance on farmland and GST at settlement, and Queensland Government guidance on the seller disclosure scheme.

Where the residential rulebook stops

Queensland's property law draws a line between homes and everything else, and the line starts with a definition. The Property Occupations Act 2014 says residential property is real property used, or intended to be used, for residential purposes, but it leaves out real property used primarily for industry, commerce or primary production. A house on a quarter-acre block is plainly inside. A dairy with a manager's cottage, a strip of shops with a flat upstairs or a factory unit sits on the other side, because its main use is not living in it. Vacant land is not automatically outside, because the definition covers land intended to be used for residential purposes. A large parcel bought to be subdivided sits less clearly, and its classification is a question for the seller's lawyer.

The same Act also defines rural land, for a separate purpose: land used, intended to be used or apparently intended to be used, for gain or profit, for grazing livestock or cultivating crops. That definition matters because of a carve-out in section 8 of the Act. A person acting as a property agent for the sale or exchange of real property that is neither residential property nor rural land is exempt from the Act for that transaction if the property reaches a floor area or estimated value set by regulation, or if each party already owns other property above those thresholds.

Two points follow for an auctioneer. Rural land never benefits from that large-scale exemption, however big the station, so a grazing property sold under the hammer keeps the full weight of the Act. And a commercial building only escapes the Act when the regulation's thresholds are met; the figures sit in the regulation rather than the Act, and whether a given campaign falls inside them is a matter for the agency's lawyer to confirm before the appointment is signed.

The auction rules the regulator lists

The Office of Fair Trading's guidance on auctioning a property, last updated on 1 July 2024, sets out the auction rules without limiting them to homes, and it does not treat commercial, rural or development land as a separate case.

The vendor may set a reserve in writing, and the agent must ask whether one has been set; the Office of Fair Trading lists a penalty of $34,540 for failing to ask. If no reserve is set, the agent must tell the vendor in writing that the highest bid has to be accepted. Every bidder must be registered before the auction starts, with identification and a numbered card or similar marker, and the auctioneer must announce that only registered bidders may bid. The agent's name must be displayed at the auction site, with limited exemptions for large open outdoor areas and bad weather, in which case it must be announced at the start. That exemption fits the kind of auction held on a paddock or a vacant block.

Vendor bids may be taken only up to the reserve and must be announced as vendor bids. Once bidding reaches the reserve, or from the first bid if there is no reserve, the property is on the market and must be sold to the highest bidder. The conditions of sale have to be disclosed, including the deposit, inspection details and other relevant terms, and the unsigned contract can be used for that purpose.

The same guidance says an agent must not give a price guide, or a figure expected to produce a successful bid, to anyone other than a person acting for the seller, and that a comparative market analysis can go to bidders only with the vendor's written agreement. The page does not say how each of these rules reaches a factory or a cattle property, so an agency running a non-residential auction confirms the position with its lawyer when the appointment is drawn up.

What changes and what stays the same

The table below sets the main differences side by side. Each line is general: the contract, the parties and the property's history decide the answer in a real sale.

Cooling-off: why it rarely features

The Office of Fair Trading says a cooling-off period of five business days applies to contracts for the sale of residential property. It also lists the contracts exempt from it: a sale by auction, a follow-up sale to a registered bidder made before 5pm on the second business day after an unsuccessful auction, and an option contract or a sale contract formed from one. Cooling-off also does not apply when the buyer is a publicly listed corporation or its subsidiary, the State or a statutory body, or when the buyer is purchasing at least three lots at the same time, whether or not in the same contract.

For the auctioneer, the practical effect is that cooling-off does not follow an auction sale of any kind. For a deal struck after an unsuccessful auction, the Office of Fair Trading frames the five-day period around residential property, so on a commercial building or a working farm the question is one for the contract and the buyer's lawyer. The three-lot exception matters on development land in particular: a builder who buys several lots in a release, at auction or straight after it, does not get a cooling-off period on any of them.

The absence of a cooling-off period is why the Queensland Government's buyer guidance stresses preparation. It says a successful bidder must settle even if the property fails inspections, the buyer changes their mind or the buyer cannot afford it. On a farm or a development site, the due diligence a buyer needs before bidding is broader than on a house: water entitlements, environmental and planning searches, existing leases, access and easements. None of that can be done after the hammer.

Seller disclosure before the hammer

Since 1 August 2025, sellers in Queensland have had to give buyers a disclosure statement and prescribed certificates under the Property Law Act 2023. The Queensland Government's page on the scheme, last updated on 21 July 2025, says it covers residential properties, commercial properties and vacant land, so an industrial shed or an englobo parcel is inside it just as a house is. For auction sales, the page says the statement and certificates must be given or made available before the fall of the hammer.

The same page lists examples of sales that are exempt, and two of them are worth noting for large non-residential lots. One is a buyer that is the State, a government body, a constructing authority or a listed corporation. The other is a sale with a price over $10 million where the buyer waives disclosure. A large rural aggregation or a major commercial site can cross that figure, but the exemption relies on the buyer's waiver, which an auctioneer cannot assume from a room full of bidders.

Bidding with GST in the price

On an existing home, GST rarely comes up: the Australian Taxation Office says the sale of existing residential premises is input taxed, so no GST is charged on the price. Commercial property is different. The Australian Taxation Office says commercial property sales are generally taxable when the seller is registered or required to be registered for GST, and new residential premises are taxable too. The Tax Office's settlement guidance gives subdivision lots as an example of land on which GST can fall.

That raises a question that never arises at a house auction: is the figure being called the whole price, or the price before GST? The answer comes from the contract and the conditions of sale, and the Office of Fair Trading requires those conditions to be disclosed. Whether bids are inclusive of GST or plus GST is therefore a condition an auctioneer states before the first bid, because the same call means two different contract prices depending on the basis.

The Australian Taxation Office adds a settlement mechanism for some land. When a buyer acquires new residential premises or potential residential land, such as a subdivision lot that could be built on but holds no residential building, the buyer generally withholds part of the price at settlement and pays it directly to the Tax Office. The amount is one-eleventh of the contract price for a fully taxable sale, or 7 per cent of the contract price when the margin scheme applies, rounded down to the nearest dollar. Withholding does not apply to commercial property, to land containing a building in commercial use, or to land sold to a GST-registered buyer who acquires it for a creditable purpose, such as building and selling homes. The seller must give the buyer a written notice before settlement saying whether withholding applies, and if it does, the notice must include the GST-inclusive contract price and the amount to withhold.

A worked example shows how the bid basis and the withholding fit together. The figures are illustrative.

Had the same lot been called on a plus-GST basis and fully taxable, a winning bid of $1,000,000 would have produced the same $1,100,000 contract price. The figure the auctioneer calls and the figure the buyer pays differ by $100,000 in that case, which is why the basis is fixed and announced before bidding starts. The margin scheme has a further point for bidders: the Australian Taxation Office says a buyer cannot claim a GST credit on property bought under the margin scheme, and the seller must have a written agreement with the buyer before settlement to use it.

Farms and going concerns sold GST-free

Two kinds of sale common at rural and commercial auctions can be GST-free, and both depend on facts settled before the auction.

The first is farmland. The Australian Taxation Office, in guidance last updated on 9 July 2025, says a sale of freehold farmland is GST-free if the land was used for a farming business for at least the five years immediately before the sale and the buyer intends it to be used for a farming business. Fixtures such as fences, dams, shearing sheds, workers' cottages and the homestead are included in the GST-free sale, the homestead only where its private use does not stop the land keeping the essential character of farmland. Subdivided farmland has a narrower rule: it is GST-free only where the land can be used for residential purposes and the sale is to an associate of the owner for no payment or less than market value. A subdivided rural lot sold at auction to an unrelated bidder will not meet that test.

The second is a going concern, such as a tenanted commercial building sold with its leases. The Australian Taxation Office says the sale must be for payment, the buyer must be registered or required to be registered for GST, and buyer and seller must agree in writing that the sale is of a going concern. The sale must include everything necessary for the business to continue, and the seller must carry it on until the day of sale. A fully tenanted building, sold with all its leases, agreements and covenants, is the Tax Office's own example; a partly tenanted one can qualify if the vacant space is being actively marketed or refurbished.

Development land and lots not yet on title

Development land brings a statute that has no counterpart at a house auction. The Land Sales Act 1984 governs the sale of proposed lots, land sold before its survey plan is registered. The Queensland Government's page on subdividing and selling land, updated on 1 July 2026, says a seller must give the buyer a signed disclosure statement and a disclosure plan prepared by a registered cadastral surveyor before a contract for a proposed lot is entered into. The statement records whether development approval has been applied for or granted, and settlement must be within 18 months of the contract date. Small-scale developers with five subdivisions or fewer are exempt from some of these rules.

The money is handled differently too. A buyer's payments towards a proposed lot must go directly into a trust account run by a real estate agent, a law practice or the Public Trustee, and the contract must name who holds it, with a maximum penalty of $34,540 or one year's imprisonment for a breach. Since 22 November 2023, a deposit under an off-the-plan land contract can be released to the seller only at settlement or when the contract otherwise ends and the seller is entitled to it. If the disclosure plan turns out to be inaccurate, section 13 of the Act requires the seller to give the buyer a further statement, prepared by a cadastral surveyor, at least 21 days before settlement; a buyer who would be materially prejudiced, for example by a lot that is significantly smaller, may terminate by written notice within 21 days of receiving it, or a longer period agreed, provided the contract has not settled.

For the auctioneer, the order of documents matters. At auction the contract is signed straight after the hammer, so the disclosure statement and plan for a proposed lot belong in bidders' hands beforehand, alongside the seller disclosure statement. The proposed-lot rules are aimed at land sold before its plan is registered. A whole parcel sold before subdivision, on its existing title, is a different transaction, though the buyer's planning and infrastructure questions go further than on any finished lot.

Deposits, settlement and the contract on the table

The Queensland Government's buyer guidance tells bidders to ask the agent how much deposit will be required, as a percentage of the winning bid, and what forms of payment are accepted. The deposit, the settlement date and any special conditions are set by the contract the seller chooses, and a commercial contract, a contract for a working farm, and a contract for proposed lots can each look very different from the standard residential form. The standard forms sold through the REIQ, for example, include a contract for the sale and purchase of commercial real estate as well as the residential one.

Whatever the form, the Office of Fair Trading requires the conditions of sale, including the deposit, to be disclosed at the auction. A bidder who wins must sign straight away and, with no cooling-off, is bound to settle on the contract's terms. A long settlement to allow a development approval, a short one for an investor, a deposit paid in two parts or a deposit bond accepted in place of cash are all possible, but only if the contract says so.

Transfer duty follows the contract date rather than the hammer's echo. The Queensland Revenue Office says the duty rates apply to residential homes, investment properties, vacant land and commercial properties, that the liability date is usually the contract date, not settlement, and that a person lodging for themselves must lodge within 30 days of it. On a large rural or commercial lot, the duty bill arrives early in the buyer's timetable, which is one more reason for buyers to engage a lawyer before bidding.

Tender and expressions of interest

Many commercial, rural and development properties never go under the hammer. The Queensland Government's guidance on selling by treaty or tender, updated on 13 April 2026, describes sale by tender as an increasingly common method: interested buyers submit an offer by a closing date, and the seller reviews them all and can accept the best or reject every one. Unlike an auction, there is no public bidding and no moment at which the property must be sold.

Campaigns marketed as expressions of interest follow a similar pattern of written offers by a closing date. The Queensland Government's guidance on ways to sell describes auction, treaty or tender and private sale, and does not set out separate rules for expressions of interest, so the general rules apply: the Office of Fair Trading says an agent needs a written appointment before acting for a client, and that agents must not engage in misleading or deceptive conduct when advertising property for sale.

Each method fits a different kind of lot. Auction suits a property with a clear market and several likely buyers who can be ready on one day. Tender and expressions of interest suit properties where buyers need to put conditions in their offers, such as finance from a specialist lender, a development approval or a due diligence period, because those conditions cannot be negotiated from the floor of an auction. A seller can also set an auction date and still accept an offer before it.

A campaign for a large lot, step by step

The steps below show how the points in this guide line up across one campaign for a commercial, rural or development lot. The order is general; the lawyer and the agency set the real timetable.

A clear call and a fair process make a good auction on any property. What changes is how much of the work sits before the first bid: on a family home, much of the law is already built into the standard contract, while on a factory or a farm it has to be settled and announced on the day.

On a farm, a factory or a future subdivision, the hard part of the auction is finished before the first bid is called.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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