The Victorian Government has introduced a temporary off-the-plan stamp duty concession to boost housing supply. This could save eligible buyers tens of thousands of dollars when buying new apartments, units or townhouses.
Off-the-plan (OTP) concession
When you buy property, you pay stamp duty on the total contract price. With purchasing off-the-plan, eligible buyers are able to deduct 100% of the construction costs that have not been incurred at the time of contract signing from the total contract price. This off-the-plan duty concession means that you will only pay stamp duty on the reduced amount.
This standard concession is available only for first home buyers or for buyers using the property as their principal place of residence.
Example: You buy a new apartment off-the-plan for $700,000. If construction costs $400,000 on your apartment, you will only pay stamp duty based on the dutiable value of $300,000.
Standard OTP concession vs temporary OTP concession
The temporary concession is calculated in the same way as the standard concession, using the formula of ‘purchase price – construction cost = dutiable value’, and using that dutiable value to calculate your final duty. However, there are some key differences between the two concessions.
Type of purchaser
The temporary concession has a broader application than previous off-the-plan concessions. It applies to all buyers, including investors, companies, and trusts (not just first home buyers or those using the property as their principal place of residence).
Type of property
The property type must be a property that forms part of a multi-lot strata subdivision which includes shared/common property, such as a shared driveway.
Eligibility criteria
To qualify for the temporary OTP concession, the contract of sale must:
- be for a new residential apartment, unit or townhouse in a strata subdivision;
- be signed before construction is completed;
- be signed within the eligibility period between 21 October 2024 and 21 October 2026.
Note: This concession does not apply to house and land packages or completed dwellings.
You can find full eligibility details on the State Revenue Office website.
Can other concessions still apply?
If you are eligible, you may be able to combine this concession with others, such as the First Home Buyer or Principal Place of Residence concessions, potentially reducing your stamp duty even further.
How do you apply?
The application is lodged electronically through Duties Online. Your conveyancer or lawyer will:
- complete the Digital Duties Form;
- obtain the construction costs shortly before settlement; and
- submit supporting documents to the State Revenue Office prior to settlement.
You can also calculate your estimated duty using the State Revenue Office’s calculator.
How we can help
At W Legal Group, we can help you confirm eligibility, gather documents and apply the concession correctly, so you don’t miss out on valuable savings.
If you’re considering an off-the-plan purchase, get in touch with our property lawyers today at 03 9590 6180 or hello@wlegalgroup.com.au for assistance applying this concession.
