On 19 November 2024, the Duties Amendment (More Homes) Act 2024 (Vic) (' the Act') received Royal Assent. The Act introduces temporary changes to the off-the-plan land transfer duty concession, providing more buyers with the opportunity to access greater stamp duty savings.
The Expanded Concession
The previous off-the-plan duty concession allowed first-home buyers and owner-occupiers to deduct construction costs from the dutiable value of the property when calculating stamp duty, where the value was below $750,000 (for first home buyers) and $550,000 (for owner-occupiers).
This meant that many purchasers were excluded from the existing concession, such as purchasers whose off-the-plan dutiable value exceeded the thresholds, or those who enter into contracts later during the construction phase of the development.
The new temporary changes include:
- Removal of the limitation to first-home buyer and owner-occupier: the new concession will be open to all purchasers (including investors, companies, and trusts) of eligible dwellings, including apartments, units and townhouses, in a strata subdivision.
- Removal of the property value-caps: The previous thresholds of $750,000 for first-home buyers and $500,000 for owner-occupiers will be removed so that the concession is available for eligible dwellings of any value.
Under the expanded concession, purchasers will be able to deduct construction costs incurred on or after the contract date. The stamp duty will then be calculated on the reduced dutiable value of the property, meaning the duty payable will be based only on the land contract price.
Eligibility for the Expanded Concession
To be eligible, the property must be:
- A residential property consisting of a single dwelling; and
- One that is in a strata subdivision with a common property, such as a shared driveway, hallway or garden. Importantly, this means that purchasers of house and land packages or other dwellings that are not part of a strata subdivision will be illegible to claim the new concession.
Additionally, the contract of sale must be signed on or after 21 October 2024 and before 21 October 2025. If a contract was entered into before 21 October 2024, the purchaser will be ineligible for the new concession, even if the settlement occurs within the 12-month window.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
