Giving a Queensland home to family: the duty and tax on a gift

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Kooky

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A parent who puts a daughter's name on the title, a brother who hands his half of an inherited house to his sister, a husband who adds his wife to the deeds: none of them thinks of the step as a sale. No agent is involved, no deposit is paid, and often no money moves at all. The tax system sees it differently. In Queensland a change of ownership is taxed on what the property is worth, not on what the family agreed to pay, and the federal rules on capital gains and the age pension start from the same idea.

This guide follows a family transfer from end to end. It sets out how the Queensland Revenue Office works out transfer duty when little or nothing is paid, which family transfers are exempt and on what conditions, what happens to the mortgage, which documents are lodged and by when, and then, in outline, what the Australian Taxation Office and Services Australia make of a gift. It describes general rules; where the answer depends on the case, it says so.

Duty recomputed from the Queensland Revenue Office rate table for an illustrative home; time limit from the Revenue Office; gifting free area from Services Australia.

A gift is taxed at the home's full value

Transfer duty in Queensland is charged on the dutiable value of a transaction. Under section 11 of the Duties Act 2001, that value is the consideration, meaning what is paid or promised, unless there is no consideration, the consideration cannot be worked out when the liability arises, or the unencumbered value of the property is greater than the consideration. In those three cases the unencumbered value is used instead. The Queensland Revenue Office sums it up as the higher of the two figures.

The unencumbered value is, in the Revenue Office's words, the value of the property being transferred disregarding any encumbrance, which in practice means market value with the mortgage ignored. A home worth $800,000 with $300,000 still owing to the bank has an unencumbered value of $800,000.

Two consequences follow, and they catch families every year. A pure gift is dutiable on the market value of what is given, and the Revenue Office says so in plain terms: duty can still apply even if no money is exchanged, and gifts and family transfers are treated the same way as ordinary purchases. A sale at a family price is dutiable on the market value too, because the unencumbered value is greater than the price. Selling to a son for half of what the home is worth does not halve the duty.

How the value has to be proved

When strangers deal with each other, the contract price is good evidence of value. Between relatives it is not, so the Revenue Office asks for more. Its list of what to lodge says that transfers between related or associated parties must include evidence of value, which it describes as a market appraisal or valuation less than three months old. For residential property that evidence must also include three recent comparable sales.

The detail sits in a public ruling on valuations of residential property, reference DA505.1. The ruling says a valuation is required where a person in the transaction is a family member of another person in it, where a company is associated with another party, where there is no consideration, or where the consideration cannot be ascertained. Acceptable evidence generally comes from a registered valuer, or from a real estate agent who is competent and independent and can support the opinion with recent comparable sales. The evidence has to identify the property by its real property description and street address, and evidence dated up to three months before the parties sign the transfer is generally accepted.

The ruling also explains how the figure is used. If the price paid falls inside the market range the valuation gives, duty is charged on the price. If the price is below the range, or there is no price at all, duty is charged on the highest value in the range. The Commissioner can obtain a separate valuation when not satisfied with what was lodged.

A low appraisal therefore saves nothing. It also matters outside the duty file, because the same market value becomes the starting point for capital gains tax and for the pension rules covered later.

The rates, and what a gift costs in duty

The general rates of transfer duty apply to a family transfer exactly as they apply to a purchase. The table below is the Revenue Office's current schedule. Duty is counted on each $100, or part of $100, of the dutiable value.

A person who will live in the home may be able to claim the home concession, which lowers the rate on the first $350,000 to $1.00 for each $100. Under the Revenue Office's concession schedule, a value between $350,000 and $540,000 attracts $3,500 plus $3.50 for each $100 over $350,000, and a value between $540,000 and $1,000,000 attracts $10,150 plus $4.50 for each $100 over $540,000. The Revenue Office describes it as available to a person who buys or acquires a residence.

Here is a worked example, with invented figures. A widowed mother owns a house in Brisbane's north with no mortgage. An independent valuation puts it at $800,000. Three versions of the family plan give three different bills.

Version one: she gifts a half share to her adult son, who lives elsewhere. The dutiable value is half of $800,000, so $400,000. No concession applies because the son will not live there. Duty is $1,050 plus $3.50 for each $100 of the $325,000 above $75,000, which is $11,375. Total: $12,425.

Version two: she sells the whole house to her daughter for $500,000, and the daughter rents it out. The price is below the unencumbered value, so the dutiable value is $800,000, not $500,000. Duty is $17,325 plus $4.50 for each $100 of the $260,000 above $540,000, which is $11,700. Total: $29,025. On the $500,000 price alone the figure would have been $15,925 ($1,050 plus $14,875), which is the saving the family may have expected and does not get.

Version three: the same sale, but the daughter moves in and qualifies for the home concession. Duty is $10,150 plus the same $11,700. Total: $21,850, which is $7,175 less than version two.

A fourth version, a half share gifted to a child who does move in, is deliberately left without a figure. The Revenue Office confirms that a person can claim a concession on their own interest or share whether or not the other owners qualify, but it describes the sums for part interests and mixed claims as complex and directs people to its transfer duty calculator instead of publishing a method.

The home concession and the August 2026 test

The home concession comes with conditions that a family transfer has to meet like any other. The Revenue Office requires the person to be acquiring as an individual and to live in the home on a daily basis within one year, a period it says cannot be extended.

Since 1 August 2026 there is a further condition. For transactions entered into on or after that date, the Revenue Office states that the person claiming the home concession must be an Australian citizen, a permanent resident or a specified foreign retiree; transactions entered into before that date are not affected. A child on a temporary visa who is given a share of the family home is therefore assessed at the general rate on that share. Separately, the Revenue Office notes that foreign persons pay additional duty of 8 per cent on acquisitions of residential land, and a gift is an acquisition.

Spouses and partners: the equal-shares exemption

The best-known family exemption is the one for couples, in section 151 of the Duties Act. It is narrower than its reputation, and the Revenue Office's conditions are worth reading one by one.

Each condition excludes something. The exemption is about the home, so an investment unit or a holiday house given to a spouse is dutiable in the ordinary way. It requires the couple to finish with the whole property between them in equal shares, so a transfer that leaves one spouse with 70 per cent, or leaves a parent or sibling on the title, falls outside it. It requires a gift, and a gift is harder to show when the incoming spouse pays something or takes on part of the home loan, because the Duties Act counts a liability assumed under a transaction as consideration. Whether a particular refinancing sits inside the exemption depends on the case.

A newer de facto couple, together for less than two years, does not meet the Revenue Office's definition of spouse for this purpose. Their transfer is dutiable, with the home concession as the possible relief.

One related exemption costs nothing and involves no gift at all. Under section 143, no duty applies to a transfer that only changes the way co-owners hold, from joint tenants to tenants in common or back, provided the value of each owner's interest does not change.

When a relationship ends

Separation is the other moment when a home commonly changes hands inside a family for no real price. The Revenue Office sets out two exemptions.

The first covers transactions that give effect to a court order or a financial agreement under the Commonwealth Family Law Act. It applies to married and de facto couples. The Revenue Office's conditions are that the sealed order or agreement is valid, was made before the transaction, specifies the property and clearly states who it is to be transferred to. Court orders must be made under Part VIII of that Act and financial agreements under Part VIIIA or Part VIIIAB. Orders or agreements made in another jurisdiction do not qualify. An informal understanding between two people who have separated is not on that list.

The second, in section 424 of the Duties Act, is for married couples only and relies on a divorce order, a decree of nullity or a decree nisi. All of the following must apply: the marriage has been dissolved or annulled; the property is transferred from the former spouse to the person claiming; the property is that person's principal place of residence; and the transfer is dated after the proceedings began.

The Titles Queensland fee calculator also states that no lodgement fee applies to a transfer under Part VIII of the Family Law Act.

Inheritance: wills, intestacy and survivorship

A home that passes on death is generally not dutiable. Under section 124 of the Duties Act, as the Revenue Office explains it, a transfer to a beneficiary is exempt when it is made according to the will or, where there is no will or none can be found, according to the rules of intestacy. The transmission application that records an executor or beneficiary on the title is not dutiable either.

The exemption follows the will, not the family's wishes. Where the beneficiaries agree among themselves to divide things differently, the Revenue Office asks for a schedule of distribution showing the property, how it is distributed, to whom and at what value, and it flags that duty may then apply, in which case evidence of value is needed. Three siblings who inherit a house in equal thirds receive those thirds free of duty; if one later takes over the other two shares, that second step is assessed on its own facts. The Revenue Office is explicit about the outsider case: a beneficiary who sells or transfers a share to someone who is not a beneficiary creates a transfer that is dutiable at the standard rate, while the original distribution stays exempt.

Joint tenancy works without any transfer by the estate. On the death of a joint tenant the share passes to the survivor under the rule of survivorship, and the Revenue Office confirms the exemption. It does not apply to tenants in common, whose shares pass through their estates. Titles Queensland's fee schedule for the 2026-27 financial year puts the fee for recording the death of a joint tenant at $46.56 for one lot.

Adding or removing a name, and the mortgage

Putting a new name on a title is a transfer of a share. Taking one off is a transfer of a share the other way. Each is assessed on the value of the interest that moves: adding an adult child as a half owner of an $800,000 home is the $400,000 transaction of the worked example.

The mortgage complicates this in two ways. For duty, the debt reduces nothing: unencumbered value ignores the mortgage, and a liability the new owner takes on counts as consideration under section 12 of the Duties Act. The Revenue Office asks for evidence of any debt assumed, such as a letter from the bank.

For the loan itself, the lender has a say. A mortgage is registered against the title and the borrowers named on the loan are the people the lender assessed. In practice a change of owners usually means the lender's consent and often a refinance, with the old mortgage released and a new one registered in the names of the new owners, each of whom must qualify to borrow. Lenders set their own conditions, so this point depends entirely on the case.

Farms, family businesses, trusts and companies

Queensland has a family business concession, and it is aimed at working assets, not at the family home. For primary production, meaning agriculture, pasturage or dairy farming, the Revenue Office applies it to business property acquired directly from a defined relative by a person who intends to run the business, and it extends to residential land on or adjacent to the farm. Defined relatives run from a spouse, parents and children out to siblings, nephews, nieces, aunts, uncles and first cousins. For a prescribed business, such as a cafe or a retail shop, the property must come from a parent or grandparent, a valuation is required, and the concession applies to the first $500,000 of business property gifted, a limit that is cumulative.

Trusts and companies are where families most often expect an exemption that does not exist. The Revenue Office's own list of dutiable transactions includes "creating a trust over land that you previously owned in your own right for your children or family members". Its trust guidance gives the example of an owner who decides to hold a building as trustee of her family trust: a trust has been created, and duty is payable on the value of the property.

A company is a separate legal person, so a transfer to a family company is a transfer to someone else, valued under the related-party rules above. The home concession is for individuals; the Revenue Office says companies are generally not eligible.

The paperwork, the fees and the deadlines

A family transfer has no contract of sale to carry it along, so the documents do the whole job. The Revenue Office's list for a transfer of land is the Titles Queensland Form 1 Transfer and Form 24, which records the property and the parties; its own Form D2.2, the dutiable transaction statement, or Form D2.1 in its place where a home concession is claimed; an identity details annexure for each transferor and transferee who is not Australian; the original agreement if there is one; evidence of value; evidence of any debt assumed; and a covering letter listing what is enclosed.

On timing, the Revenue Office requires documents to be lodged within 30 days from when the liability arises. Where there is a contract that is usually the contract date. Where there is none, as with most gifts, it is 30 days after the last person signs the transfer. A family that lodges directly then receives a notice of assessment stating the duty and its due date. A solicitor or conveyancer registered as a self assessor lodges online within the same 30 days, and payment is then due 14 days later. Late lodgement or late payment can bring penalty tax and interest.

Registration has its own fee. Titles Queensland's schedule for 2026-27 sets the fee for lodging a transfer at $248.04 for one lot, plus $46.56 for each $10,000, or part of $10,000, of consideration above $180,000. The schedule is written in terms of consideration, and the Titles Queensland fee calculator instructs users to enter zero where there is no monetary consideration. For version two of the worked example, with its $500,000 price, the fee comes to $248.04 plus 32 steps of $46.56, or $1,737.96.

The federal side: capital gains tax and the pension

Duty is paid by the person receiving the home. Capital gains tax is the concern of the person giving it. The Australian Taxation Office applies what it calls the market value substitution rule: where property is sold, transferred or gifted for more or less than its market value, and the two people were not dealing at arm's length, the giver is treated as having received the market value. The ATO's example is a father who sells a rental property to his son for the $120,000 owing on the mortgage when it is valued at $450,000. His capital proceeds are $450,000.

The main residence exemption applies to a gift as it does to a sale, so a home that has been the owner's main residence throughout is generally outside the tax. A property that was rented out, or only partly a home, is not fully protected, and the limits of the exemption are the subject of an earlier guide. The ATO also notes that the market value rule may not apply to a transfer to a former spouse after a relationship breakdown, and that a transfer to the trustee of a special disability trust for no payment is disregarded.

For older parents the third system is the age pension. Services Australia looks at whether a person has given away cash, assets or income and received less than market value in return. Its gifting free area is the same for a single person and a couple: $10,000 in any one financial year, and $30,000 over a rolling period of five financial years. Anything above that still counts as the giver's asset for five years from the date of the gift, and deeming applies to it, so it can weigh on both the assets test and the income test. A half share of a house is far above either limit.

Finally, the new owner inherits the land tax question. The Revenue Office's own note on estates says that receiving an interest in land may affect a person's land tax liability; a share of a home the new owner does not live in is counted with whatever other Queensland land they hold.

A family can agree on any price it likes, including none. The value on the valuer's page is the one every tax office works from.

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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