We have been closely following any changes to the state of play in the Retirement legislation here in Queensland, particularly in regard to the “Guaranteed Buyback” arrangements and specifically their impacts on freehold retirement village unit owners and operators.
For those who have not been following, mandatory purchase provisions designed to protect freehold village unit residents have raised many questions about how this will work, and the impact it will have on both residents and Operators. How will freehold village operators operating under a “management rights” style contract afford to buyback the units they never owned or sold? How long will the queue be to apply to the Queensland Civil and Administrative Tribunal (QCAT) for an extension of time to purchase the unit if the it will cause them financial hardship?
Now fresh uncertainty has come in the guise of a new duty exemption related to Retirement Village mandatory buybacks. The recent insertion into the Duties Act 2001 by the Health and Other Legislation Amendment Act 2019 which received assent in March somewhat ambiguously states: “Transfer duty is not imposed on a dutiable transaction under the Retirement Villages Act 1999, section 63A.” There are no further details provided or circumstances where this may take effect, prompting even the Queensland Law Society to seek clarification from the Office of State Revenue about the operation of this exemption.
The Queensland Government website provides Operators with a “toolkit” for self-assessing and applying for the duty exemption, and can be found here: https://www.business.qld.gov.au/industries/service-industries-professionals/professional-financial-services/transfer-duty/self-assessors/toolkits/duties-act-exemptions/section-141a
There are clearly more issues to work through with this buyback legislation.
This new exemption seems to be one attempt to assist those Operators for whom buyback is not financially viable as we have touched on in our earlier Insight article – Is new buyback legislation the end of freehold retirement village units in Queensland?