The Victorian Government has introduced three new land transfer duty measures as part of the 2021-22 Victorian Budget. We have provided a summary of each measure below.

If you have any questions regarding any of the measures, including assistance in determining your eligibility, please contact us on 03 5443 0344 or email afs@afsbendigo.com.au

Land transfer duty concession or exemption for City of Melbourne residential property transactions

There is a temporary land transfer (stamp) duty concession and exemption available on purchases of residential property, with a dutiable value of up to $1 million, located within the City of Melbourne local government area.

The concessions and exemption available are:

• a 50% concession for new residential properties, applying to properties where the contract was entered into from 1 July 2021 to 30 June 2022
• a full exemption for new residential properties that have remained unsold for 12 months or more since completion of construction, applying to properties where the contract was entered into from 1 May 2021 to 30 June 2022.

The 50% concession applies after all other eligible benefits have been taken into account, such as:

• first home buyer concession
• principal place of residence concession (including any off-the-plan concession)
• pensioner concession.

Am I eligible?

To be eligible for this concession or exemption, your property purchase must:

• be residential property
• have a new home affixed to the land
• have a dutiable valued of $1 million or less
• be located in the City of Melbourne local government area
• be a bona fide purchase for adequate consideration (not a gift).

For more information on the property concession and exemption, including how to apply, click here.

Off-the-plan duty concession

Buying a home before any building works have commenced or have finished is known as ‘buying off-the-plan’. When you buy off-the-plan, you may be eligible for a duty concession that can apply to contracts for:

• land and building packages
• lots in vertical developments (such as residential towers)
• lots in horizontal developments (such as low-rise apartments and unit complexes)
• refurbished lots.

The date of the contract is important as it affects the scope of the off-the-plan concession.

How does the concession work?

You pay duty on the dutiable value of your property, which is usually the price paid for the property or its market value, whichever is greater. However, when the off-the-plan concession applies, the dutiable value is the contract price minus the construction or refurbishment costs incurred on or after the contract date. This reduces the amount of duty you pay.

Am I eligible?

Eligibility for this concession depends on a number of factors, with the most important being when you signed your contract.

To be eligible, you must pay at least the market value for your property. If your contract price is less than market value, duty will be assessed on the property’s value at the time you entered into the contract.

The full eligibility criteria for this concession is extensive and you should view the State Revenue Office website for more information.

For more information on this concession, including full eligibility criteria and how to apply, click here.

Premium duty rate of agreements or arrangements entered into before 1 July 2021.

There has been a premium rate of land transfer duty introduced for high-value property transactions with a value of more than $2 million.

From 1 July 2021, the duty payable will increase to $110,000 plus 6.5% of the dutiable value of more than $2 million.

The premium rate of duty does not apply to a dutiable transaction or an acquisition of an interest in a landholder that occurs on or after 1 July 2021 that was made pursuant to an agreement or arrangement entered into before 1 July 2021.

Meaning of agreement or arrangement

An agreement or arrangement is considered to mean a concerted action or plan to undertake a specific transaction. 

While an executed binding agreement for the transfer is not required to show that there is a concerted action or a plan, the concerted action or plan must:

• be in writing
• be sufficiently certain  
• envisage the dutiable transaction. 

A commitment to undertake the dutiable transaction must be shown, rather than simply being an intention to investigate or consider it. 

For more information on this duty rate, click here.