Option Agreements: Flexible Property Deals with Hidden Risks
Option Agreements can be powerful tools in Queensland property and commercial transactions. They give one or both parties flexibility to buy or sell property in the future without committing immediately.
But Option Agreements are highly technical legal documents and a single poorly drafted clause could cost you thousands in tax, stamp duty, or lost opportunities.
At Enterprise Legal, our team of qualified property and commercial lawyers (not just conveyancers) helps clients across Queensland negotiate, draft, and review Option Agreements to protect their commercial interests and avoid costly traps.
Whether you’re a developer looking to secure land for a future project, or a property owner approached with an offer for an Option, we’ll ensure you understand your rights, risks, and obligations in clear, practical terms. We also offer our services on a fixed or capped fee basis wherever possible, so you can plan with confidence.
Types of Option Agreements
Option Agreements in Queensland come in several forms:
Call Options
- Gives the buyer the right (but not the obligation) to purchase the property within a set timeframe, at a pre-agreed price.
- Often used by developers to secure sites while they obtain development approvals.
- The seller is locked in if the buyer exercises the option.
Put Options
- Gives the seller the right to require the buyer to purchase the property at an agreed price within a certain period.
- Less common but sometimes used in commercial arrangements or as security in complex transactions.
Put and Call Options
- Combines both rights:
- The seller can force the sale (put).
- The buyer can choose to proceed (call).
- Often used to:
- manage stamp duty timing
- give developers flexibility
- keep deals off public records until certain milestones are met.
Why Use Option Agreements?
Option Agreements can be valuable tools for both sellers and buyers because they:
- Secure property without immediate commitment.
Developers can tie up sites while seeking planning approvals without paying the full purchase price upfront. - Lock in a price for future purchase.
Buyers can benefit from potential capital growth during the option period. - Allow time for due diligence and approvals.
Buyers have time to investigate zoning, contamination, planning approvals, and financing. - Assist with Capital Gains Tax (CGT) planning.
Option Agreements can sometimes help sellers manage the timing of CGT events for better tax outcomes. - Allow time to set up business structures.
Parties can establish trusts, companies, or joint ventures before exercising the option, ensuring the ultimate purchaser or seller is structured tax-effectively. - Manage stamp duty timing.
Correctly structured options can delay duty liability until the contract is exercised. - Spread financial risk.
Sellers can secure a potential buyer and option fee while retaining ownership if the deal doesn’t proceed.
But with these benefits come significant risks; especially around tax, stamp duty, and legal enforceability. This is not an area for DIY contracts.
Our Option Agreement Legal Services
When you engage Enterprise Legal for your Option Agreement, we:
- Draft clear, enforceable Option Agreements tailored to your specific deal structure.
- Review and explain existing option terms offered by developers or other parties.
- Advise on GST and stamp duty consequences, including the risk of duty being triggered on the grant of the option itself.
- Negotiate option fees, timeframes, and commercial terms.
- Advise on nominee provisions, crucial for developers who may wish to assign the option to another entity.
- Check compliance with the latest legal requirements under the Property Law Act 2023 and other Queensland laws.
- Collaborate with your accountant or financial advisor to ensure the option arrangement aligns with your broader tax planning, asset protection, and business structuring strategies.
- Prepare or review Seller Disclosure Statements required when an option is exercised and converted into a contract of sale.
At Enterprise Legal, we combine legal precision with commercial practicality and we’re upfront about costs, offering fixed or capped fees wherever possible.
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Why Choose Enterprise Legal for Option Agreements?
Seller Disclosure Statement: When Is It Needed?
From 1 August 2025, sellers of residential property in Queensland, including those selling freehold retirement village units or lots in lifestyle resorts, must provide a legally compliant Seller Disclosure Statement before signing a contract under the new Property Law Act 2023.
This means:
- Exercising an option triggers disclosure requirements.
- Even if the option was signed years earlier, the seller disclosure must be up-to-date and compliant at the time the contract is formed.
Failing to provide proper disclosure could allow the buyer to terminate the contract or claim compensation, even after signing.
At Enterprise Legal, we:
- Prepare or review Seller Disclosure Statements for freehold retirement properties.
- Ensure all documents, body corporate records, and financial disclosures are accurate and compliant.
- Protect your rights whether you’re buying or selling.
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Option Agreement FAQs
Thinking about using an Option Agreement? Book a consultation with our experienced lawyers today and protect your commercial interests.
What Is a Call Option in Property?
How Much Is a Typical Option Fee?
• a nominal sum ($1)
• a percentage of the purchase price (often 1–5%)
• a significant amount for development sites
We help negotiate a fair and commercially sensible option fee.
Can I Sell My Option to Someone Else?
Does Stamp Duty Apply on an Option Agreement?
• on granting the option (in certain circumstances)
• or on exercising the option and signing the contract
We’ll advise you on how to structure your deal to manage duty costs.
Can Option Agreements Help With Tax Planning?
• time the triggering of capital gains tax
• manage when income is recognised for tax purposes
• structure deals through new entities (like trusts or companies) before exercise
We work closely with your accountant to ensure your transaction is tax-efficient and legally sound.
Why Should a Lawyer Review My Option Agreement?
• the terms protect your commercial interests
• you understand tax and duty implications
• your option is legally enforceable
A small legal fee upfront can save thousands down the track.