Can I transfer property from my business to myself?
As seasoned conveyancing solicitors on the Sunshine Coast, QLD, we often hear curious questions like, “I own this property through my company, but now I want to move it into my personal name. Is that a simple change?”
The desire to transfer ownership often comes from a perfectly sensible commercial or personal reason—perhaps you want to move the property into a family trust, or simply wish to use it as your private residence.
While the physical act of changing the name on the title deed is straightforward, the legal and financial process is anything but a simple change of address. Before you decide to transfer property ownership, you must understand the substantial tax and duty implications under Queensland conveyancing law. Today, let’s unpack the reality of a personal property transfer from a business entity to an individual.
The Legal Reality: It’s a Full Sale Transaction
Even if you are the sole director or beneficiary of the entity, the law treats the transfer of property ownership from your business to yourself as a formal, “non-arm’s length” sales transaction. It’s a full, two-party property transfer requiring a formal contract of sale. So, you need to engage in the full residential conveyancing process, including:
Drafting a formal Contract of Sale between the legal entity (the seller) and you, the individual (the buyer).
Preparing and lodging a Form 1 Transfer with the Queensland Land Registry.
Ensuring the property is properly valued for tax purposes, which leads us to the biggest cost consideration.
The Transfer Duty (Stamp Duty) Hurdle
This is where the costs start adding up, and where many people are initially surprised. In Queensland, transfer duty (commonly known as stamp duty) is payable on the higher of either the purchase price or the unencumbered market value of the property.
Since this is a related-party transfer, the Queensland Revenue Office (QRO) will always assess the stamp duty based on the property’s certified market value, even if you structure the sale for a nominal amount (say, $1).
Independent Valuation Is Necessary: You will typically need to obtain a professional, independent valuation of the property to satisfy the Revenue Office. The duty is calculated on this figure.
No Discount for Related Parties: There are almost no exemptions for property transfers between a company and its director, or a trustee and its beneficiary, in standard circumstances. You, as the buyer, will be required to pay the full duty rate applicable to a property purchase.
Simply put, you cannot bypass transfer duty just because you are moving the property from one pocket (the business) to another (your own).
The Tax Trap: Capital Gains Tax (CGT)
While stamp duty is a state tax, Capital Gains Tax (CGT) is a federal tax and represents the other major pitfall in a transfer-of-ownership scenario.
When a business entity transfers the property out of its name, it is deemed a CGT event by the Australian Taxation Office (ATO).
Deemed Market Value: Just like with stamp duty, the ATO assesses the sale price at the property’s market value, regardless of the actual price you paid to the company. The company (the seller) must calculate its capital gain based on the difference between the market value and its original cost base.
Companies Miss Out: If the business entity is a company, it cannot access the 50% CGT discount that is typically available to individuals who hold an asset for more than 12 months. This means the entire capital gain is potentially taxable at the corporate tax rate.
Division 7A Risk (for Companies): If you, the director, buy the property from the company for less than the market value, the difference could be treated as an unfranked dividend or an assessable loan to you under specific tax rules (known as Division 7A). This can trigger an immediate and substantial personal tax liability.
This complexity emphasises why an accountant and a conveyancing solicitor need to work together on this personal property transfer.
Our Take: Talk to Us Before You Act
Trying to execute this kind of transaction without proper legal advice can be extraordinarily costly. A seemingly simple transfer of property ownership becomes a highly complex matter involving contract law, state revenue, and federal tax law.
Before you make any move on a Queensland conveyancing matter involving a business entity, come and talk to us first. We specialise in residential conveyancing and complex property transactions, and we can coordinate with your accountant to map out the most tax-effective and legally sound path forward.
We’re right here on the Sunshine Coast and are ready to talk to you about your circumstances. Give us a call today to schedule your initial consultation.
Disclaimer: This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm, or another firm to provide legal advice in relation to your matter. Bradley & Bray lawyers take no responsibility for any use of the information provided in this article.
