A buyer purchases a Queensland property at auction for $800,000. The property was marketed with an advertised price guide of $650,000 to $700,000. For transfer duty calculation purposes, the duty is assessed on:

Q: What is the correct answer to: A buyer purchases a Queensland property at auction for $800,000. The property was marketed with an advertised price guide of $650,000 to $700,000. For transfer duty calculation purposes, the duty is assessed on:

The correct answer is The actual purchase price of $800,000 or the market value, whichever is higher. Transfer duty in Queensland is calculated on the higher of the actual consideration (purchase price) and the market value of the property. The advertised price guide ($650,000-$700,000) is irrelevant for duty calculation. Since the auction price of $800,000 is the agreed consideration, duty is assessed on that amount or market value if higher.

Q: What background knowledge is needed for this Finance Taxation question?

The Duties Act 2001 assesses transfer duty on the 'dutiable value' which is the greater of the consideration paid and the unencumbered value (market value). For arm's length transactions like auctions, the purchase price typically equals or exceeds market value.

Q: What is a good way to remember the answer to this Finance Taxation question?

Transfer duty is on the HIGHER of purchase PRICE or market VALUE. Not the advertised guide, not the council value. Duty calculation: take the actual price paid, compare to market value, and use whichever is HIGHER.

Q: What exam tip applies to this Finance Taxation question?

Transfer duty is always based on the HIGHER of purchase price or market value — marketing guides are irrelevant.

Q: How does this Finance Taxation concept apply in Australian real estate practice?

A property marketed at $650K-$700K sells at auction for $800,000. The buyer's solicitor calculates transfer duty on $800,000 (the actual price). If the market value were somehow determined to be $820,000, duty would be on $820,000 instead.

Question

Finance TaxationQLDHARD

A buyer purchases a Queensland property at auction for $800,000. The property was marketed with an advertised price guide of $650,000 to $700,000. For transfer duty calculation purposes, the duty is assessed on:

Answer Options

A

The midpoint of the advertised price guide ($675,000)

B

The actual purchase price of $800,000 or the market value, whichever is higher

C

The Valuer-General's unimproved land value

D

The advertised upper price guide of $700,000