On 21 October 2024, the Victorian Government announced a new temporary off-the-plan land transfer (stamp) duty concession. The Duties Amendment (More Homes) Act 2024, which provides for this concession, received Royal Assent on 19 November 2024.
The new concession will be available for off-the-plan purchases of dwellings (including apartments and townhouses) within strata subdivisions that have common property where the contract is entered into on or after 21 October 2024 and before 21 October 2025.
The concession will benefit those who are not eligible for the existing off-the-plan concession, which still remains.
How does the concession work?
A new off-the-plan concession for purchases of dwellings in a strata subdivision will be available for contracts entered into on or after 21 October 2024 and before 21 October 2025.
The new concession will be available to all off-the-plan purchases and will allow the purchaser to deduct the construction costs incurred on or after the contract date when determining the dutiable value of the purchaser’s property.
The concession will be available to all purchasers, including investors, companies and trusts, meaning there would be no requirement to be eligible for either the principal place of residence duty concession or the first home buyer duty exemption or concession.
The existing off-the-plan concession for owner-occupiers and first home buyers will continue to apply.
There is no threshold for this concession. The concession is available for apartments, units and townhouses of any value.
Am I eligible?
To be eligible, the property must be a lot in a strata subdivision that has common property, such as a shared driveway.
The concession does not apply to house-and-land packages which are not part of a strata subdivision that has common property.
Timing of the concession
Eligibility is based on the date the contract of sale is entered into, irrespective of whether settlement occurs before or after the end of the 12-month window in which the concession applies.
Contracts signed before the commencement date of this concession, but settled during the 12-month window, are ineligible.
Foreign purchaser additional duty
The concession does not apply to foreign purchaser additional duty (FPAD) as this is calculated on the dutiable value of the property before any off-the-plan concession is applied. The off-the-plan concession will only apply to the general land transfer duty liability.
Calculating the concession
The calculation of duty under the new off-the-plan concession will operate similarly to the existing off-the-plan concession.
When the new off-the-plan concession applies, purchasers will be able to deduct the construction costs incurred on or after the contract date from the dutiable value of the property. Land transfer duty will then be calculated on this reduced amount. Other concessions may also apply based on this reduced amount.