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Off The Plan Stamp Duty Concessions Expanded for 12 Months
With the draft legislation revealed this article has now been updated and can be found here
The Victorian Premier has this morning 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 that will help to 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 (including 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 industry will eagerly be awaiting the first draft of the next State Taxation Omnibus Amendment Bill which is expected to be proposed next week before State Parliament to confirm the specifics. Until then, we understand that the existing first home buyer concessions will remain but will now be uncapped as to the property value.
It has been made clear in the announcement that the concessions will not apply to house and land packages but there is no certainty on how a ‘strata subdivision’ or ‘townhouse’ will be defined for the purposes of the legislation. It is unclear for example whether a subdivision must include common property or if a shared party-wall is sufficient for it to be caught by the legislation.
We understand that there will be 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.
We will provide a further update as soon as the information is available as we remain at the forefront of property development in Victoria.
