Insights Library
Draft Legislation Revealed – Off The Plan Stamp Duty Concessions Reintroduced for 12 Months (Updated 7.11.24)
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. It is a positive move to assist housing affordability that we and our clients have been advocating for, and it will help restore project feasibilities hindered for years by policy changes and construction costs.
The new concession will be available for off-the-plan purchases of dwellings (that is, residential apartments, units and townhouses) within strata subdivisions where the contract is entered into from 21 October 2024, for 12 months. Stamp duty will only be payable on the value of the land at the time of signing of the contract (regardless of the total sale price of the finished product). The Victorian Government estimates that it could reduce the stamp duty of buyers of a new $620,000 apartment down to just $4,000 representing a saving of $28,000.
The new concession is proposed in the Duties Amendment (More Homes) Bill 2024, which confirms, amongst other things, that it will apply:
- if the residential property is a lot in a ‘strata subdivision’ that has common property; and
- if the property is a residential property consisting of a single ‘dwelling’ within that strata subdivision; and
- to contracts entered on or after 21 October 2024 and before 21 October 2025.
“Strata subdivision’ has the same meaning given to it in section 4 of the Transfer of Land Act 1958, that is 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 that a townhouse subdivision with only a party-wall easement and no other common property will not qualify for the concession despite various stakeholders (including our office) advocating for this to be included in the draft Bill.
It should be noted that the Bill also provides that the concession will not apply if the Commissioner determines that a contract that qualifies for the concession replaces a previous contract for the purchase of the same property entered into before 21 October 2024.
There is also no cap on the property value and no limitation on purchaser eligibility criteria, making the concession available to all purchasers including investors, companies and trusts. Importantly, the concession will also extend to foreign purchasers but foreign buyer surcharges will remain in place. It will unfortunately not apply to house and land packages however.
We will provide further update as soon as the Bill has been passed or any other information is available as we remain at the forefront of property development in Victoria.
