Land Transfer (stamp) duty waiver
Written by Nagisa Takaki
When you buy or acquire a property, you will likely have to pay transfer (stamp) duty. Stamp duty is a mandatory tax that state & territory governments levy. The amount of duty you pay depends on the value of the property and your eligibility.
Victorian Government has announced a land transfer (stamp) duty waiver for purchases of Victorian residential property with a dutiable value of up to $1 million, which applies to contracts entered into on or after 25 November 2020 and before 1 July 2021.
For new residential properties, a 50% land transfer duty waiver of the duty payable otherwise applies.
For existing residential properties, a 25% land transfer duty waiver of the duty payable otherwise applies.
For vacant residential land, a 25% land transfer duty waiver of the duty payable otherwise applies.
The waiver applies after all other eligible benefits, such as the first home buyer duty concession, the principal place of residence concession and the pensioner concession, have been taken into account. However, the waiver does not apply to foreign purchaser additional duty.
To be eligible for this land transfer duty waiver, your purchase:
must be for residential property, whether or not it is used as your principal place of residence;
have a dutiable value of $1 million or less;
have a contract that must be signed on or after 25 November 2020 and before 1 July 2021; and
the arrangement must be a bona fide purchase for adequate consideration (no a gift).
NOTE: This land transfer duty waiver does NOT apply to:
any residential property transaction with a dutiable value over $1 million.
a transfer that obtains the commercial and industrial land concession i.e. the purchase of residential property in regional Victoria for the purpose of converting it to be used for a commercial or industrial use.
How much is stamp duty (VIC)?
Enter your details in the State Revenue Office’s duty calculator and it will calculate the stamp duty payable: https://www.e-business.sro.vic.gov.au/calculators/land-transfer-duty
Definition of a new home
A ‘new home’ has the same meaning as it does under the First Home Owner Grant Act 2000. It includes a newly built home and a land and building package or homes which have undergone substantial renovation.
Whether the waiver applies to a gift transfer
The waiver is only available for bona fide purchases of residential property for adequate consideration. Bona fide means ‘genuine’ purchases. Gifts or other transactions which do not involve consideration will not be entitled to the waiver.
Does the transfer have to be completed within the waiver period?
No, it is not necessary for the transfer of the property (i.e. settlement of the purchase) to occur during the waiver period. If the contract for the purchase was entered into during the eligibility period (on or after 25 November 2020 and before 1 July 2021) and all other eligibility criteria has been met, a transfer after 30 June 2021 will be entitled to the waiver.
Does the purchaser have to live in the property and treat it as their principal place of residence?
No. The waiver can apply to the purchase of investment property.
Will the waiver apply in conjunction with other concessions?
Yes, the waiver will apply to the land transfer duty payable after all other relevant concession are applied to the transfer such as:
First home buyer duty concession
Principal place of residence concession
Off-the-plan concession; and
NOTE: the waiver does not apply to any foreign purchaser additional duty payable on the transfer, or transactions that obtain the regional commercial and industrial land concession.
This information provided this article is general advice only. Should you have any queries, please do not hesitate to contact our office.