The Victorian Government has announced a new temporary stamp duty concession for off-the-plan purchases of apartments, units and townhouses.
The measures are an expansion to the existing off-the-plan concession regime – making the concession now available to all purchasers who enter into eligible off-the-plan contracts from 21 October 2024 to 20 October 2025.
Currently, the concession is only available for individuals who are first home buyers and/or owner-occupiers and there are capped thresholds in place.
However, for the next 12 months, investors, companies, trusts and individuals can reap the benefits of the broader off-the-plan concession which allows all purchasers of off the plan residential properties in strata subdivisions to calculate and pay stamp duty only on the land value at the day of sale rather than the full purchase price. Construction costs incurred after the contract date, are excluded from the calculation of duty. And this applies regardless of the value of the property.
So, what’s the catch?
- the concession will not apply to house and land packages or other non-strata subdivisions; and
- to be eligible, you must sign a contract for an eligible property on or after 21 October 2024 (contracts signed before this date are not eligible for the concession).
For now, the operation of the existing off-the-plan concession remains the same and new legislation (to operate retrospectively) is expected to be enacted imminently.
After years of heavy taxing that has stifled investment in Victoria, these temporary measures will mark a positive shift in welcoming investors back and will primarily benefit those developers who are currently in the presales or early constructions phases of their projects. Developers will be scrambling to get projects to market to take advantage of this incentive.
