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Stamp Duty Changes to Off-the-Plan Purchases

Off-the-Plan Stamp Duty Reductions in Victoria: New Concessions Starting October 21, 2024

Tax news might not be the most thrilling topic, but us as conveyancers must keep updated with Victorian Stamp Duty changes. In the famous words of Benjamin Franklin:

In this world nothing can be said to be certain, except death and taxes.

— Franklin in a letter to Jean-Baptiste Le Roy, 1789[1]

Exciting News for Property Buyers: Temporary Stamp Duty Concessions in Victoria

On October 21, 2024, Victorian Premier Jacinta Allan introduced a temporary stamp duty concession for off-the-plan property purchases. This one-year concession aims to stimulate the construction and sale of off-the-plan properties, including apartments, units, and townhouses. The concession will run until October 20, 2025, offering significant stamp duty savings for eligible property buyers across Victoria. 

Please note that as of the time of writing, this concession has not yet been enacted into legislation.

Eligibility Requirements for the Off-the-Plan Stamp Duty Concession

  1. Timing: To qualify for the off the plan stamp duty concession, buyers must sign a contract on or after October 21, 2024. If you signed a contract prior to this date, unfortunately, you will not be eligible for the concession, even if settlement occurs within the eligibility window. Attention buyers who may have signed contracts over the weekend: sorry, but this concession may not apply to you!! 
  2. Strata Property The property must be located in a strata subdivision, which typically includes shared common property such as a shared driveway, garage, storage spaces or other communal area. “Strata Property” often includes apartments, units, and townhouses. 
  3. “Off the Plan” The property must be classified as an off-the-plan purchase, meaning that the buyer is entering into a contract for a property that is either under construction or not yet built. Buyers make their decision based on design plans, architectural models, or brochures. For more info, visit the Consumer Affairs website. 

Some important exclusions

  • House and Land Packages: These properties are not eligible
  • Foreign Purchaser Additional Duty (FPAD). FPAD is calculated on the full dutiable value of the property, without any reduction from the off-the-plan concession. Unfortunately, foreign purchasers will still be liable for this additional duty.

FAQs

1. What is an off-the plan property?

An off-the-plan property is one that is purchased before it has been fully built or completed. Buyers commit to purchasing based on plans, designs, and sometimes display models, with the property itself still under construction or yet to start being built.
 
2. I signed a contract before October 21, but settlement hasn’t happened yet. Am I still eligible?

No, unfortunately you’re not eligible for this stamp duty concession if you signed the contract before October 21, 2024.

3. What if I sign a contract and settle before the concession is legislated?

If you sign an off-the-plan contract on or after October 21, 2024, but the transaction settles before the concession becomes law, you will need to pay the full stamp duty initially. However, according to the State Revenue Office, once the measure is legislated, you can apply for a refund of the stamp duty that you overpaid.

4. What happens if my transaction settles after the concession eligibility window?

Your eligibility for the off-the-plan stamp duty concession is determined by the date you sign your contract, not the settlement date. As long as your contract is signed between October 21, 2024, and October 20, 2025, you will be eligible, even if the transaction settles after this period.

Sources:

Disclaimer

The information provided in this article is intended for general guidance only and should not be construed as legal advice. Stamp duty concessions, including the off-the-plan concession, are subject to change and must comply with current Victorian legislation. Eligibility criteria, timing, and other factors may affect your entitlement to these concessions. It is essential to seek professional legal advice or consult a licensed conveyancer (our office) to ensure you understand your specific situation and comply with all legal requirements. Contact our Melbourne-based conveyancing team in Bentleigh, Victoria to receive specific advice on your property purchase. 

Contact Us

Postal Address: PO Box 167, Bentleigh VIC 3204
Phone: 03 9557 3344
Email: matt@conveyancingexcellence.com.au
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