If you are an eligible pensioner, you may be entitled to a once-only exemption or concession from paying duty when you buy a home valued at not more than $750,000.

Who is eligible?

To receive this benefit, you must:

  • Be the holder of one of the approved concession cards at the date of the transfer, being the settlement date,
  • Buy the property for market value, and
  • Intend to reside in the home as your principal place of residence (PPR)

The home may be an established home, a home built under a house and land package (where the person who sells you the land also builds the home as part of the agreed price), or a home that is built within three years of acquiring the land.

House and land value

Where there is an existing home on the land at the time of the transfer, the relevant value is the purchase price or the market value (whichever is the greater) of the land and home.

Where there was no home on the land at the time of the transfer but a home was constructed on the land within three years after that time, the relevant value is the purchase price or the market value (whichever is the greater) of the land plus the construction cost of the home.

Exemption/concession amounts

The amount of your exemption or concession depends on the value of your purchase, the contract date, and your interest in the property.

Generally, a full exemption is available for homes valued up to $330,000 and a concession is available for homes valued at less than $750,000.

Calculate your exemption/concession

Buying a share in a property

Where you buy a share (fractional interest) in a property rather than the whole property, your exemption/concession will be assessed on the value of your share. This applies even when you buy with another person who is not eligible.

You must, however, still meet all the requirements to receive the exemption or concession and must not have received a pensioner concession or exemption, rebate or refund of duty in respect of a previous transfer.

Example

Eric, who is an eligible pensioner, and Elizabeth, who is not an eligible pensioner, each purchase 50 per cent of a property. The total purchase price is $600,000.

The current threshold limit for a pensioner exemption is $330,000. Therefore Eric is fully exempt as his 50 per cent interest in the property equates to $300,000.

Elizabeth must pay duty. The duty on $600,000 is $31,070 so Elizabeth is liable to duty of $15,535, being 50 per cent of $31,070.

Related party transfers/nominations

The exemption/concession is only available to genuine purchasers for adequate consideration.

This ensures that duty relief is available only to purchasers who provide full consideration for a property purchased (or fractional interest purchased) and not to those who have already benefited by purchasing at a heavily discounted price or have received the property as a gift.

For all sales between related or associated parties, additional evidence is required to ensure that adequate consideration has been paid:

  • Proof of payment of the purchase price (e.g. bank statements, loan agreements and receipts), and
  • Evidence of the market value of the property, such as:
    • a letter of appraisal from a licensed real estate agent, or
    • a valuation by a certified practising valuer who is a member of the Australian Property Institute or by a member of the Real Estate Institute of Victoria with sworn valuer accreditation

Refunds

The exemption or concession will only be provided when the home is complete. If you have paid duty on the transfer, you can apply for a refund if a home is constructed within the three-year period. You have five years from the date the duty was paid to apply for a refund.

Can you also get a PPR concession?

If you are entitled to the pensioner concession, you will automatically benefit from the duty concession for a PPR. You do not need to complete the relevant PPR statutory declaration form.

Can you also get a First Home Bonus?

The First Home Bonus is a payment available in addition to the First Home Owner Grant. It is only available in respect of your first home purchase and other eligibility criteria apply.

If your contract was entered into before 1 July 2012 and it was your first home purchase, the bonus may still be available to you. You cannot, however, receive both the bonus and this pensioner concession. You can elect to receive one or the other.

If you think you may qualify for both the bonus and the pensioner concession, please call us on 13 21 61.

Depending on the value of the property purchased, it may be more advantageous to receive the bonus than the exemption/concession. If you choose to receive the bonus, your duty liability will be calculated using the PPR duty rate.

As a guide, we have made the following calculations on the basis that there is an existing home on the land at the time of transfer. You are encouraged to seek advice from a qualified adviser as to which option is better for you.

These figures may differ slightly for an eligible pensioner who purchased a vacant block and built a house on it within three years of the transfer. Please note the bonus ceased on 1 July 2012.

 

Pensioner exemption/concession vs. the First Home Bonus

 
Contract date Amount of bonus Value of purchase Which is worth more?

From 1 July 2011 to 30 June 2012

$6500 regional bonus plus $13,000 for new home

Purchase price up to $600,000

Bonus

Purchase price from $600,001 up to $750,000

Pensioner exemption or concession

$13,000 for new home

Purchase price up to $600,000

Bonus

Purchase price from $600,001 up to $750,000

Pensioner exemption or concession

No bonus available for established homes

Purchase price up to $750,000

Pensioner exemption or concession

From 1 July 2010 to 30 June 2011

$6500 regional bonus plus $13,000 for new home

Purchase price up to $440,000

Bonus

$13,000 for new home

Purchase price up to $440,000

Bonus

No bonus available for established homes

Purchase price up to $440,000

Pensioner exemption or concession

Can you also get a first-home buyer duty reduction?

If you qualify for the pensioner exemption/concession and the first-home buyer duty reduction you have the choice of receiving one or the other. You cannot receive both.

Depending on the value of the property purchased, it may be more advantageous to receive the duty reduction than the pensioner exemption/concession.

As a guide, we have made the following calculations on the basis that there is an existing home on the land at the time of transfer.

 

Pensioner exemption/concession vs. the first-home buyer duty reduction

 
Contract date Value of purchase Which is worth more?

From 1 July 2011 to 30 June 2012

Purchase price up to $330,000

Pensioner exemption or concession

Purchase price from $330,001 up to $562,066

Pensioner exemption or concession

Purchase price $562,067

Pensioner exemption or concession is equal to duty reduction for eligible first-home buyers

Purchase price from $562,068 up to $600,000

Reduction of duty for eligible first-home buyers

Purchase price from $600,001 up to $750,000

Pensioner exemption or concession (reduction of duty for eligible first-home buyers is not available)

You are encouraged to seek advice from a qualified adviser as to which option is better for you. The above figures may be slightly different for an eligible pensioner who purchased a vacant block and built a house on it within three years of the transfer.

Apply for the exemption or concession

Apply for a pensioner exemption or concession