Transfer Duty (Victoria) - Exemption and Concessions

We are often asked about the Exemptions and Concessions available in Victoria for Stamp Duty. Here's a quick guide.


There have been new temporary concessions introduced during the pandemic period and there are more new concessions which commence on 1st July 2021. Refer areas in blue.


Principal Place of Residence (PPR)

A duty concession is available when you buy:

  • a new or established property valued up to $550,000,

  • which you intend to move into within 12 months of your settlement date and

  • live there as your primary home for at least a year.

The First Home Buyer duty exemption or concession

Eligibility depends on you entering into a contract of sale to buy your first home on or after 1 July 2017 and your home has a dutiable value of:

  • $600,000 or less to receive the first home buyer duty exemption,

  • $600,001 to $750,000 to receive the first home buyer duty concession.

All the purchasers of the property must meet the First Home Owner Grant eligibility criteria, and

at least one purchaser satisfies the residency requirement.


Pensioner

If you are an eligible pensioner, you may be entitled to a once-only:

  • exemption from duty when you buy a home with a market value of $330,000 or less, or

  • concession from duty when you buy a home with a market value from $330,001 to $750,000.

You must intend to live in the home as your principal place of residence.


Off-the-Plan Concession

Only available if you qualify for:

  • the principal place of residence concession (value of property, after applying the off-the-plan concession, cannot exceed $550,000), or

  • the first-home buyer duty exemption/concession (where property value after the off-the-plan concession cannot exceed $750,000).

The new premises must be your principal place of residence. You must reside in it for a continuous period of 12 months, starting within 12 months of possession, normally settlement.


New Concession: The eligibility threshold for the off-the-plan duty concession will temporarily increase to $1 million for all home buyers for contracts that are entered into on or after 1 July 2021 and on or before 30 June 2023.


Other Concessions & Exemptions

A number of exemptions and concessions for land transfer duty are available. Many of these are aimed at homebuyers, but others include:

  • Deceased estates – Executor to beneficiary

  • Transfer between spouse or partner

  • Regional commercial, industrial and extractive industries properties

  • Family farms – if conditions are met.

  • Young farmers – buying their first farmland property.

  • Corporate consolidation and reconstructions – transferring assets between corporations that are members of the corporate group.

  • Charities and friendly societies – certain exemptions from land transfer duty may be available.

Refund

Importantly, if you believe you may have overpaid your duty, you can apply for a reassessment.

Additional Temporary Concessions - Up to 30 June 2021

Currently, there are duty waivers if you meet the following criteria:

  • your purchase must be for residential property, whether or not you use it as your principal place of residence,

  • have a dutiable value of $1 million or less,

  • the contract must be signed on or after 25 November 2020 and before 1 July 2021, and

  • the arrangement must be a bona fide purchase for adequate consideration (not a gift).

The waivers apply to properties with a dutiable value of up to $1 million.

  • For new residential properties, a 50% land transfer duty waiver of the duty otherwise payable applies.

  • For existing residential properties, a 25% land transfer duty waiver of the duty otherwise payable applies.

  • For vacant residential land, a 25% land transfer duty waiver of the duty otherwise payable applies.

The waiver applies after all other eligible benefits, such as the first home buyer duty concession, the principal place of residence concession and the pensioner concession, have been taken into account. However, the waiver does not apply to foreign purchaser additional duty.


New Concession: Duty Waivers from 1st July 2021


A 50% concession

New residential properties that have been unsold for less than 12 months where the contract is entered into on or after 1 July 2021 and on or before 30 June 2022.


A full exemption

New residential properties that have remained unsold for 12 months or more since completion of construction where the contract is entered into on or after 21 May 2021 and on or before 30 June 2022.


At May Klye & Associates, we specialise in dealing with the accounting and tax aspects affecting property investors, be they residential or commercial. We have well over a hundred property investor clients, and we have extensive experience in getting them the best tax outcome. If you would like to know more, call Noel or Amanda on 03 9585 7555 or email us at enquiries@mktax.com.au