How a call option and a put and call option over property work, why developers use them to secure land, what landowners should check before signing, and how Queensland duty applies.
An option agreement over land gives a buyer the right, but not the obligation, to buy the property at an agreed price within a set period, in return for an option fee. In a put and call option over property in Queensland, the buyer holds a call option that lets it require the owner to sell, and the owner holds a put option that lets it require the buyer to buy, so once the option periods run either side can trigger the contract of sale. Developers use option agreements to secure land while they investigate it or seek a development approval, and in Queensland the grant of an option over land is itself dutiable.
An option agreement is a contract in which a landowner grants someone else the exclusive right to buy their land on agreed terms during an agreed period. The buyer pays an option fee for that right. Until the option is exercised there is no binding sale: the owner still owns the land, and the buyer has only a right that it may or may not use. If it uses the right, a contract of sale – usually attached to the option agreement in its final form – comes into effect at the price and on the terms already agreed.
For land, option agreements are most often used by developers and land buyers who need time before they can commit to a purchase: time to check the zoning and overlays, test the yield, confirm services, line up finance or lodge a development application. An option agreement over land lets them lock in the site without carrying the full purchase price during that period.
With a call option, the owner grants the buyer the right to “call” for the land. During the call option period the buyer can investigate the site, design a scheme or apply for approval. If it decides to proceed, it exercises the option by giving written notice in the way the agreement requires, and the contract of sale becomes binding at the agreed price. If it decides not to proceed, it simply lets the option lapse: the owner keeps the land and, depending on the agreement, keeps the option fee.
A call option alone gives the buyer all the flexibility. The owner is committed to sell if the option is exercised, but has no right to make the buyer buy.
A put and call option adds a second right that belongs to the owner. The buyer still holds a call option for the first period. If the buyer has not exercised its call option by the end of that period, the owner can then exercise a put option, usually within a short window, to require the buyer to buy at the agreed price. Once either option is exercised, the contract of sale is binding on both parties.
Because the owner can force the sale, a put and call option gives the owner far more certainty than a call option alone, while the developer still controls the timing during the call period. In practice, a put and call option over property in Queensland behaves much like a delayed sale: both parties know a sale will happen unless they agree otherwise, and the option periods decide when.
Which suits you depends on how much certainty you need, how long you can wait and the price on offer. Approval-based terms should allow realistic time for every stage of an application – see how long a DA takes in Queensland.
Your solicitor should prepare or review the option agreement and the attached contract before you sign, including which seller disclosure documents must be given and when.
The Queensland Revenue Office treats the grant of an option to purchase dutiable property, such as land, as the acquisition of a new right, so the option agreement is dutiable and is generally self-assessed. An option usually involves two transactions that are assessed separately: the option agreement itself, and the later agreement to transfer the land if the option is exercised. Duty on each is worked out on the consideration for that transaction.
Duty on the option is charged on the entire consideration to acquire it, even if part of that consideration depends on a condition that has not been met. The QRO’s own example is a $5,000 option fee plus a further $10,000 payable if a condition is satisfied: duty is assessed on the total of $15,000 even if the condition is never fulfilled. If the option is exercised, transfer duty is charged on the agreement to transfer, and a credit for the duty paid on the option is allowed only if the option agreement states that the option fee forms part of the consideration for the land. A transfer of an existing option to someone else is also a dutiable transaction.
Duty is usually the buyer’s cost, but how the agreement is drafted affects the total, so raise it with your solicitor early.
Whether GST applies to the option fee and to the sale depends on who is selling and what is being sold. If the parties want to use the GST margin scheme for the sale, the ATO requires them to agree in writing before settlement. Capital gains tax may also be relevant to the option fee and the eventual sale. This guide is general information only: get advice from your accountant on your own situation, using the official ATO guidance listed below.
Suppose a developer offers an owner of a 1 ha rural-residential block a put and call option: a 9-month call period while it lodges a development application, then a 1-month put period for the owner, with the price fixed today and the option fee forming part of the price. If the application is approved early, the developer exercises its call and settles. If the developer has not exercised by month nine, the owner can exercise the put and the developer must buy anyway. Compare that with a contract subject to approval, which might lapse if the approval takes longer than the condition allows, and with an unconditional offer at a lower price. The right choice depends on the numbers and on how much risk the owner wants to carry.
GC Prestige specialises in development sites, amalgamations and off-market land sales across the Gold Coast, Logan, Brisbane and South East Queensland. Our development arm, South AZ Developments, has secured 21 development sites across the region, and our managing director, Oktay Vali, has settled more than $200 million in property transactions. We negotiate price and terms – including option fees, option periods and approval conditions – for landowners and developers, while your solicitor prepares and reviews the agreement. If you are weighing an option against an outright sale, our guide to how to sell a development site and a free, no-obligation development-site appraisal are good places to start.
A put and call option on property in Queensland gives the buyer a call option to require the owner to sell, and the owner a put option to require the buyer to buy, at an agreed price. Once either option is exercised the contract of sale is binding, so the sale is close to certain unless both parties agree otherwise.
An option agreement over land is a contract in which the owner grants a buyer the exclusive right, but not the obligation, to buy the land on agreed terms within a set period, in return for an option fee.
That depends on the option agreement. Usually the owner keeps the option fee if the option is not exercised, but the agreement must say so clearly.
Only if the agreement says so. In Queensland, stating that the option fee forms part of the consideration also allows a credit for the duty paid on the option when the option is exercised.
Yes, if the option relates to dutiable property such as land. Duty is assessed on the option agreement, on its entire consideration, and again on the agreement to transfer if the option is exercised.
Generally not, because the option holder has the exclusive right to buy at the agreed price during the option period. Check the agreement with your solicitor.
Because the put option gives the owner the right to require the sale, which provides much more certainty than a call option alone, while still letting the developer seek an approval first.
Yes. We negotiate price and terms for landowners and developers across South East Queensland, and your solicitor prepares and reviews the agreement.
General information only, current at 11 November 2026. This guide is not legal, financial, tax or planning advice. Rules change, so check the official sources above and get advice from a solicitor, accountant or town planner for your situation. Updated 11 November 2026 by GC Prestige, 1300 937 981.