New Property Law Act 2023 (Qld)

Queensland’s property law has significantly changed with the passing into law of the Property Law Act 2023 (Qld) (New PLA) on 25 October 2023, which is awaiting royal assent.

The New PLA brings in significant changes. One of which is the abolition of the common law rule against perpetuities.

The perpetuity law provides that an interest in property must vest earlier than 21 years after the death of a person alive at the time the interest was created. This rule was modified to a perpetuity period of up to 80 years. For a trust, this means that property can only be held on trust for up to 80 years from the date of disposition of the property to the trust.

The New PLA abolishes the 80 years perpetuity rule and replacing it with a new fixed perpetuity period of 125 years for trusts that holds property in Queensland. This 125-year period commences from the date of the disposition of the property to the person under the trust. A shorter period can be accepted in a trust deed.

Existing trusts will be able to “opt in” to the new fixed perpetuity period. If the terms of a trust provide the trustee with the power to amend the vesting date, the trustee can extend the date to 125 years. If the trustee does not have the power to vary the vesting date, all the beneficiaries under the trust can execute a deed to vary the vesting date and set it at 125 years.

Note, this does not necessarily mean that trusts established in or hold property in other jurisdictions should amend their trust deeds. There needs to be a sufficient nexus or connection with Queensland and appropriate advice should be obtained. We would be happy to provide such advice if requested.

Accordingly, if trusts hold real property, particularly, in Queensland, you should undertake a review of the trust deeds and consider if the trust deed should be amended to change the perpetuity period or vesting date to 125 years. However, note, that any variations to existing trust arrangements in light of the New PLA should carefully consider any tax or duty implications that may arise.

Albus Legal can assist with a review of the trust deed including amendments and advice required in relation to establishing a sufficient nexus or connection for trusts not established in Queensland or for trusts that do not hold real property in Queensland.