The Victorian Premier has announced the immediate introduction of extensive off-the-plan stamp duty concessions under a 12-month stimulus plan to support the property sector and encourage development within established inner-city suburbs. This positive move to assist housing affordability, which we and our clients have been advocating for, will help restore project feasibilities that have been hindered for years by policy changes and construction costs.
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Stamp Duty Concessions by Best Hooper Lawyers
06 December 2024
The new concession will be available for off-the-plan purchases of dwellings (residential apartments, units and townhouses) within strata subdivisions where contracts are entered into from 21 October 2024, for 12 months. Stamp duty will be payable only on the land value at the time of contract signing, regardless of the finished product's total sale price. The Victorian Government estimates this could reduce the stamp duty on a new $620,000 apartment to just $4,000, representing a saving of $28,000.
- The new concession, proposed in the Duties Amendment (More Homes) Bill 2024, confirms it will apply:
- if the residential property is a lot in a 'strata subdivision' that has common property;
- if the property is a residential property consisting of a single 'dwelling' within that strata subdivision
- to contracts entered into between 21 October 2024 and 21 October 2025.
'Strata subdivision' has the same meaning as in section 4 of the Transfer of Land Act 1958: a subdivision of land by sale, transfer or partition into two or more units or into two or more units and common property, whether or not any unit is on the same level as any other unit. Unfortunately, this means townhouse subdivisions with only party-wall easements and no other common property will not qualify for the concession, despite various stakeholders (including our office) advocating for their inclusion in the draft Bill.
The Bill stipulates that the concession will not apply if the Commissioner determines that a qualifying contract replaces a previous contract for the same property entered into before 21 October 2024.
There is no cap on property value and no limitation on purchaser eligibility criteria, making the concession available to all purchasers, including investors, companies and trusts. Importantly, while the concession will extend to foreign purchasers, foreign buyer surcharges will remain in place. Unfortunately, the concession excludes house and land packages.
Adapted with permission from an original article by Giancarlo Romano and Maliq Maideen at Best Hooper Lawyers.
