If you signed a contract before 1 July 2017, the off-the-plan concession is available to all purchasers and for all property types, including residential investment properties and commercial properties. This means that the stamp duty is calculated on the dutiable value regardless if you are buying the property for living in or for investments.
Even if the purchaser has nominated a substituted purchaser after 1 July 2017, all purchasers are still eligible for the off-the-plan concession, as long as the contract was signed before 1 July 2017.
Now, if you signed a contract on or after 1 July 2017, the off-the-plan concession is available only if you are using the property as your principal place of residence (PPR) and meets the value threshold and residence requirements.
What is the value threshold? If you are a first home buyer, meeting first home buyer eligibility requirements, the off-the-plan concession will be applicable when the property’s dutiable value is less than $750,000. The first home buyer duty exemption and concession will also apply.
If you are a PPR buyer but not a first home buyer, the off-the-plan concession is only applicable when the property’s dutiable value is less than $550,000. Similarly, the PPR concession will also apply.
What is the dutiable value? Dutiable value is the contract price minus the construction or refurbishment costs incurred on or after the contract date, thus the dutiable value of a property is usually less than the contract price. This dutiable value is usually determined by the vendor’s solicitor and won’t be provided until the settlement is called upon.
Below are a few examples of the off-the-plan concession eligibility for property purchased on and after 1 July 2017:
After 1 July 2017, Mimi signs a contract to buy an off-the-plan townhouse for $900,000. She is not a first home buyer but is buying the townhouse to live in as her home.
The vendor advises Mimi that $160,000 of his contract price will be spent on constructing the remainder of the townhouse. This means that the dutiable value of Mimi’s townhouse, after applying the off-the-plan concession, is $740,000 ($900,000 – $160,000).
$740,000 is more than the principal place of residence duty threshold of $550,000, so Mimi is not entitled to the off-the-plan concession or the principal place of residence concession. She will need to pay stamp duty base on the value of $900,000.
Note: the below information is also available on the State Revenue Office website here