How Much Is Transfer Duty for a Foreign Buyer on a $1M Queensland Property?
A foreign buyer puts an offer on a $1 million Queensland home. Their Australian agent quotes transfer duty at roughly $38,000 and the buyer looks relieved — until the conveyancer’s costs schedule arrives with another $80,000 on top. That gap is the Additional Foreign Acquirer Duty (AFAD), and it is the single most common duty surprise in foreign-purchaser transactions.
The short answer: a foreign buyer purchasing a $1 million Queensland residential property as an investment will pay approximately $118,025 in total transfer duty — comprising around $38,025 in standard transfer duty and $80,000 in AFAD. If the buyer intends to live in the property and qualifies for the home concession, the standard duty component drops to around $30,850, reducing the combined figure to roughly $110,850. Either way, the duty bill is substantially larger than what a domestic buyer faces for the same property.
Understanding exactly how that number is built — and what variables can shift it — is essential knowledge for any Queensland agent working with overseas buyers, migration clients, or investors from Singapore, Hong Kong, mainland China, or elsewhere.
What Is AFAD and Why Does It Exist?
Additional Foreign Acquirer Duty (AFAD) is an extra 8% of duty that applies to transactions that are liable for transfer duty, landholder duty or corporate trustee duty, when the acquirer is a foreign person and the transaction involves AFAD residential land.
AFAD was introduced to ensure foreign acquirers of residential property who benefit from government services and infrastructure also contribute to their delivery, the same as local buyers. It is not a penalty — it is a structural levy, and it applies regardless of whether the purchase is for investment or owner-occupation.
AFAD applies to direct and indirect acquisitions of AFAD residential land in Queensland by foreign persons at the following rates: 3% where the transaction’s liability for transfer duty arises between 1 October 2016 and 30 June 2018; 7% where the transaction’s liability for transfer duty arises between 1 July 2018 and 30 June 2024; and 8% where the transaction’s liability for transfer duty arises on or after 1 July 2024.
That July 2024 increase matters for contracts in progress. AFAD will continue to apply to a transaction even if the buyer’s foreign status changes to Australian citizen or permanent resident at a later date. Because duty is imposed on a relevant transaction at the time the liability for duty on the transaction arises, a change of residency status will not affect the liability. This allows for taxpayer certainty on liability under the Duties Act 2001.
That last point is one of the most practical warnings for agents: a buyer who is in the process of obtaining permanent residency still pays AFAD at the rate applicable on the contract date. Signing the contract before residency is confirmed locks in the surcharge.
Who Qualifies as a Foreign Person Under Queensland Law?
A “foreign person” includes a foreign individual (not an Australian citizen or permanent resident), a foreign corporation, and the trustee of a foreign trust. You are a foreign individual if you are NOT an Australian citizen or permanent resident.
That is the test. Visa type, length of time in Australia, and intent to remain are all irrelevant to the foreign-person determination for AFAD purposes. A buyer on a temporary skilled visa who has lived in Queensland for five years is still a foreign person. A buyer who holds a temporary partner visa while awaiting permanence is still a foreign person.
New Zealand citizens on SCV 444 visas are exempt from the surcharge. This exemption is specifically legislated and applies to the subclass 444 Special Category Visa only — it does not extend to other New Zealand visa categories.
Rules around companies and trusts with foreign interests get complicated fast — if there’s any foreign ownership or control in the buying entity, AFAD can apply. Agents working with buyers who propose to purchase through a company or trust structure should direct them to their conveyancer before any contract is signed. The interaction between corporate structures and AFAD can generate unexpected duty outcomes.
What Counts as AFAD Residential Land?
AFAD residential land is land in Queensland that is or will be used solely or primarily for residential purposes, where particular conditions are met.
This covers the full range of standard residential stock: houses, townhouses, apartments, and units. AFAD only applies to residential land. Commercial and industrial properties are exempt.
AFAD residential land does not include land used for hotels and motels. Other types of residential property such as retirement villages and student accommodation are considered on a case-by-case basis.
For mixed-use properties — a shop with a residence above it, for example — duty must be apportioned between residential and non-residential components. Residential concessions or foreign surcharges apply only to the residential portion where relevant; the commercial component is always assessed at standard rates. This apportionment can significantly reduce the AFAD liability on commercial-residential hybrid properties, and is worth flagging to buyers considering such purchases.
The Full Numbers: Transfer Duty for a Foreign Buyer on a $1M Queensland Property
Queensland transfer duty operates on a progressive marginal rate system under the Duties Act 2001. Duty is calculated on the property’s sale price or current market value, whichever is higher.
Scenario 1: Foreign Investor (No Concession)
A foreign buyer purchasing a $1 million residential property as an investment — not their principal place of residence — has no entitlement to the home concession. Standard transfer duty at the general rate on a $1 million property is approximately $38,025.
In addition to standard transfer duty, foreign buyers may also need to pay an 8% Additional Foreign Acquirer Duty (AFAD) on residential property. This surcharge is applied to the dutiable value and must be included in the total payment.
AFAD on $1,000,000 at 8% = $80,000.
On a $1 million residential purchase, a foreign buyer could pay an additional $80,000 in AFAD on top of the usual transfer duty.
Total transfer duty liability (investor): approximately $118,025.
Scenario 2: Foreign Buyer as Owner-Occupier (Home Concession)
As a foreign acquirer, you can still claim one of the home concessions. The home concession applies a lower rate on the first $350,000 of the property value, saving owner-occupiers approximately $7,175 compared to the standard investor rate.
For a foreign buyer moving in as their principal place of residence, standard transfer duty at the home concession rate on a $1 million property is approximately $30,850. AFAD on $1,000,000 remains $80,000.
However, a home concession will only apply to the transfer duty component, not the AFAD amount. AFAD is charged at the full 8% regardless of whether a concession is claimed on the standard duty.
Total transfer duty liability (owner-occupier with home concession): approximately $110,850.
If a foreign buyer is moving in as their principal place of residence, the standard duty fee would be approximately $30,850, plus an AFAD fee of 8% of the purchase price — an additional $80,000.
Scenario 3: Joint Purchase — One Foreign, One Australian
If there are multiple transferees, AFAD applies only to the interests of the foreign acquirers. For example, if there are 3 individual transferees in equal shares but only one is a foreign acquirer, AFAD applies to that person’s one-third interest.
So if a foreign buyer and an Australian partner purchase a $1 million property as joint tenants in equal shares, AFAD applies only to the 50% foreign interest. AFAD = 8% × $500,000 = $40,000. Standard duty is still calculated on the full $1 million — the concession apportionment applies only to AFAD, not to the underlying duty itself.
This is one of the most common hidden risks for overseas investors. If a foreign acquirer buys a property jointly with others, AFAD is charged only on the foreign buyer’s proportional interest. In practice, this means joint purchases between a foreign and Australian party at $1 million can reduce AFAD exposure significantly. It also creates a clear planning question that agents should raise early: how is the property to be held, and does the ownership structure affect AFAD?
AFAD and the Home Concession: The Interaction Agents Must Understand
The home concession does not eliminate AFAD. This is a common misunderstanding and one that creates problems when buyers budget based on the standard rate alone.
Foreign persons acquiring residential property in Queensland face an additional 8% transfer duty surcharge on top of standard rates. This AFAD applies even when other concessions are claimed.
This surcharge applies irrespective of the property’s value or its intended use, whether for personal residence or investment. A foreign buyer who intends to live in the property, moves in on time, and meets every concession requirement still pays the full 8% on top. The concession reduces the standard duty; it has no effect on AFAD.
The only AFAD exemption available to individual buyers relates to specified foreign retirees. Foreign retirees buying their principal place of residence on or after 1 January 2023 may be exempt from AFAD. This is a narrow exemption tied to specific visa subclasses (405 and 410) and involves occupancy and disposal conditions that must be strictly maintained. Agents who have retirement-visa buyers should flag this possibility and ensure those buyers obtain advice from their conveyancer before contract.
The FIRB Layer: Federal Costs on Top of State Duty
Transfer duty and AFAD are Queensland state taxes. Foreign buyers also face a separate federal obligation: Foreign Investment Review Board (FIRB) approval.
FIRB is the federal government body that regulates foreign investment in residential properties across Australia. A foreign person generally must apply to FIRB and obtain approval before buying residential property in Australia. If approval is not obtained before contract signing, the purchaser could face penalties, including forced divestment of the property.
An important policy development affects established dwellings specifically. From 1 April 2025 to 31 March 2027, foreign persons are banned from purchasing established dwellings unless a very limited exception applies. This fee disparity reinforces Australia’s long-standing policy objective: foreign buyers should add to housing supply, not compete with Australians for existing homes.
For the purposes of FIRB fees on residential property acquisitions up to $1 million: fees start at $45,300 for acquisitions of $1 million or less, rising to a maximum of $3,615,600 for acquisitions of more (for established dwellings under the July 2025 guidance). This represents a significant upfront cost even before any duty is calculated.
Beyond AFAD, foreign buyers face other increased costs, including a higher annual land tax surcharge, which increased from 2% to 3% starting from the 2024-25 tax year, and federal FIRB fees that have approximately tripled since April 2024.
The vacancy fee compounds this further. Foreign persons who own residential properties purchased after 9 May 2017 are required to pay an annual vacancy fee if their dwelling is not residentially occupied or genuinely available for rent for a term of at least 30 days for 183 days or more in a 12-month period.
For agents: the total upfront government costs on a $1 million foreign purchase of a new dwelling — duty, AFAD, and FIRB — can easily exceed $160,000. This is not the number most overseas buyers are expecting when they first enquire. Getting it on the table early, in writing, prevents collapsed deals late in the process.
How AFAD Is Assessed and Paid
If AFAD applies to a transaction, the buyer must lodge the transaction documents and any required forms within 30 days. Transfer duty must be lodged within 30 days of the contract becoming unconditional, and payment is due within 14 days of lodgement. In practice, the conveyancer or solicitor manages the lodgement and payment through the QRO Online system, with the duty paid electronically at or before settlement.
Late payment carries serious consequences. Failing to meet this 30-day deadline carries significant financial repercussions. Buyers face the imposition of Unpaid Tax Interest (UTI), which accrues daily. The rate for 2024–25 stands at 12.36%. On a liability of $118,025, that interest compounds fast.
The applicable rate is based on the date the contract is entered into, not the settlement date. This is critical when contracts have long settlement periods — the AFAD rate locked in at exchange is the one that applies, even if rates change before settlement.
Transfer duty is assessed on the higher of the contract or purchase price or the property’s market (dutiable) value. If the parties are related, associated, or the transfer isn’t at arm’s length, a formal valuation may be required. Agents facilitating related-party transactions — say, a sale from an Australian relative to a foreign family member — should anticipate the QRO scrutinising the dutiable value, potentially triggering a formal valuation that could increase the duty base.
Practical Scenarios: The Numbers Side by Side
To make this concrete, here is a comparison of transfer duty liability across three buyer types for the same $1 million Queensland residential property purchase (established dwelling, not first home):
- Australian investor (general rate): approximately $38,025
- Australian owner-occupier (home concession): approximately $30,850
- Foreign buyer, investor (general rate + AFAD): approximately $118,025
- Foreign buyer, owner-occupier (home concession + AFAD): approximately $110,850
- Joint purchase, foreign 50% + Australian 50%, investment: approximately $58,025 (standard duty $38,025 + AFAD on 50% interest $20,000)
These figures illustrate why the ownership structure conversation is so important to have at the first meeting, not after the contract has been signed.
The top marginal rate of $5.75 per $100 applies uniformly above $1 million — Queensland does not impose a separate premium property surcharge like NSW. For foreign buyers considering $1 million versus slightly above, there is no duty cliff at the $1 million mark other than the marginal rate change at that threshold.
Recent Policy Trends: The Direction of Travel
The escalating costs for foreign investors, encompassing AFAD, higher annual land tax surcharges, and tripled federal FIRB fees, demonstrate a clear and concerted policy trend by both Queensland and Federal governments to disincentivise foreign investment in residential property.
Since 2016, the AFAD rate has moved in only one direction: upward — from 3% to 7% to 8%. There is no policy indication of a reversal. Queensland agents who have been advising clients based on the pre-July 2024 rate of 7% need to ensure their precedent documents, fee schedules, and buyer guides have been updated.
The policy shifts observed in 2025, such as the strong incentives for new builds and disincentives for foreign investors, indicate a broader governmental strategy aimed at increasing housing supply and improving affordability for domestic buyers. For agents, this signals a market where new dwellings are increasingly the only viable entry point for foreign buyers — established stock is either prohibited or carries substantially higher FIRB fees — and where the duty gap between domestic and foreign buyers will likely remain wide.
What This Means for Queensland Agents
Quote the full number from the first conversation. On a $1 million sale to a foreign investor, the duty exposure is around $118,025 — not $38,025. Buyers who arrive at settlement expecting the domestic figure will not be back as repeat clients, and they may not get to settlement at all if the shortfall collapses their financing.
Establish foreign-person status at the first meeting. The question is binary: Australian citizen or permanent resident, or not. Temporary visa holders — including partner visas, skilled visas, and student visas — are foreign persons. New Zealand citizens on subclass 444 visas are the only common exception. Don’t assume. Confirm.
Structure matters and must be addressed early. Joint purchases between a foreign and Australian party reduce AFAD to the foreign person’s proportional interest only. A buyer acquiring 50% of a $1 million property pays AFAD on $500,000, not the full million. This is a legitimate and material planning opportunity — but only if the ownership structure is agreed before exchange.
FIRB approval must precede the contract. If FIRB approval is not obtained before contract signing, the purchaser could face penalties, including forced divestment of the property. Agents should flag this clearly to foreign buyers and build sufficient time into the contract for approval to be obtained. Conditional contracts with a FIRB approval condition offer the appropriate protection.
The home concession does not offset AFAD. Foreign owner-occupiers save approximately $7,175 through the home concession but still pay the full 8% AFAD. The combined duty on a $1 million owner-occupier purchase is still around $110,850 — and that does not include FIRB fees or land tax implications.
For established versus new stock, know the FIRB rules. The prohibition on foreign purchases of established dwellings (1 April 2025 to 31 March 2027) dramatically limits foreign buyer options in the established market. New dwellings and off-the-plan remain the viable pathway, with comparatively lower FIRB fees and no blanket prohibition.
The duty burden on a transfer duty foreign buyer on a $1 million Queensland property is not a nuance — it is a fundamental feature of the transaction. Agents who understand it, communicate it clearly, and build it into their buyer management process will close more deals and avoid the ones that should never have been signed in the first place.