Pensioner and concession cardholder duty reduction (contracts before 1 July 2023)
Duty exemption or concession for contracts before 1 July 2023.
This information is for contracts signed before 1 July 2023. Different rules apply to contracts signed on or after 1 July 2023.
Key information
If you are an eligible concession cardholder, including a pensioner, you may be entitled to a one-off duty exemption or concession.
For contracts entered into before 1 July 2023:
- an exemption from duty applies if the property value is $330,000 or less
- a concession from duty applies if the property is valued from $330,001 to $750,000.
If you are buying your first home, you must choose between the pensioner duty reduction and the first home buyer exemption or concession. Whichever you choose, you may still be eligible for the First Home Owner Grant.
If you are eligible for this reduction, any principal place of residence concession is applied automatically. You do not need to claim it.
Eligibility
You are eligible for the reduction if you:
- hold one of the approved concession cards at the date of the transfer (settlement)
- buy the property for market value
- intend to live in the home as your principal place of residence (your home).
The home can be:
- an established home
- a home bought off the plan, such as a house and land package where the person who sells you the land also builds the home as part of the agreed price
- a home that is built within 3 years of you acquiring the vacant land.
Calculating the duty reduction
Generally, a full exemption from duty applies for homes valued up to $330,000 and a concession applies for homes valued from $330,001 to $750,000.
Example A
Cora is an eligible cardholder. She buys her home for $300,000. No duty is paid on the transfer of the property.
Example B
Rose is an eligible cardholder. She buys her home for $700,000. Concessional duty applies because the dutiable value of the property is more than $330,000 but less than $750,000.
Dutiable value depends on the property type
The exemption or concession is based on the dutiable value of the property. This depends on the type of property.
For established homes:
- the dutiable value is the purchase price or the market value, whichever is greater.
For off-the-plan homes, the exemption or concession is based on the:
- contract price, and the
- dutiable value, including the off-the-plan concession.
Your vendor will provide the dutiable value of your property, including the off-the-plan concession. Dutiable value in this scenario is calculated using information provided by, and a method chosen by, the vendor.
For vacant land where you are building a home within 3 years, the concession or exemption is based on the:
- dutiable value of the vacant land, being the purchase price or the market value (whichever is greater), and the
- construction cost of the home.
Vacant land duty payments and refunds
If you buy vacant land and then build your home within 3 years:
- you must pay the usual duty when you buy the land
- you can then apply for a refund once the home is completed.
You must pay duty within 30 days of settlement on the land and apply for a refund within 5 years of paying the duty.
Calculate how much duty you will pay
Use our calculators to estimate the duty you will pay and compare your options:
Buying a share in a property
If you buy a share (a fractional interest) in a property, the exemption or concession is assessed on the value of your share.
The duty you pay on the transfer is the total of the duty that applies to all purchasers.
Example C
Christos and Molly are both eligible cardholders. They buy their home together for $600,000 and each owns 50%. Each share is $300,000, so both are below the $330,000 threshold. No duty is paid.
Example D
Dan and James are both eligible cardholders. They buy their home together for $600,000. Dan owns 20% ($120,000) and pays no duty. James owns 80% ($480,000) and pays the concessional duty on his share.
You may still be entitled to the exemption or concession even when you buy with another person who is not eligible.
Example E
Avi is an eligible cardholder who buys a home with Elizabeth, who is not an eligible cardholder. They each have a 50% interest in the property. The purchase price is $600,000.
Avi’s share is exempt as his 50% interest in the property equates to $300,000.
Elizabeth pays duty on her share ($300,000).
Related party transfers
The exemption or concession is only available to genuine purchasers who pay at least the market price for their home.
This ensures that duty relief does not benefit those who purchase their home at a heavily discounted price or receive the property as a gift.
For all sales between related or associated parties, you must provide evidence that you have paid at least the market price for your home. This includes:
- proof of payment of the purchase price (e.g. bank statements, loan agreements and receipts)
- evidence of the market value of the property, such as a:
- letter of appraisal from a licensed real estate agent that is no more than 6 months old, or
- valuation by a certified practising valuer who is a member of the Australian Property Institute or the Real Estate Institute of Victoria with sworn valuer accreditation that is no more than 12 months old.