Special disability trusts exemption

Key information

An exemption from duty may be available for: 

• establishing a special disability trust
• transferring a home to the trustee of a special disability trust. 

Different rules apply to declarations of trust or transfers completed before 1 July 2023.

The exemption only applies if an immediate family member gifts the home to the trustee for the principal beneficiary. Property type, dutiable value thresholds and principal place of residence (PPR) requirements apply.

Exemption eligibility

Special disability trust

A special disability trust allows immediate family members to plan for the current and future needs of a person with a severe disability. Special disability trusts are regulated under the Social Security Act 1991 and must meet requirements for:

• beneficiaries
• trust purpose
• trustees
• trust property
• trust expenditure
• reporting.

Principal beneficiary

A special disability trust can only have one beneficiary, known as the principal beneficiary. The principal beneficiary must meet requisite impairment and disability conditions. 

To be eligible to be a principal beneficiary, if aged 16 or over, the person with a disability must:

• have an impairment that would qualify them for the disability support pension, or similar invalidity or permanent incapacity payments
• require certain full-time care
• not be able to work more than 7 hours a week for a wage that is at or above the minimum wage, or outside the supported wage system, due to a disability.

If a principal beneficiary is aged under 16, different requirements apply. They must have a severe disability or severe medical condition supported by evidence from a treating health professional. 

Services Australia or the Department of Veterans’ Affairs determines whether a person would be eligible as a principal beneficiary of a special disability trust.

Immediate family member and gifting requirement

The exemption is only available where an immediate family member gifts a home to the trustee of a special disability trust for the principal beneficiary. An immediate family member includes a parent, legal guardian, grandparent or sibling.

The home must be gifted to the trustee. The exemption does not apply if the trustee pays or gives anything of value in return.

Eligible property transfers

The exemption only applies to transfers of a home.

Different dutiable value thresholds apply depending on how the home is to be used:

• Where the principal beneficiary intends to use the home as their PPR, the dutiable value must be $1.5 million or less.
• For any other non-PPR home, the dutiable value must be $500,000 or less.

If the dutiable value of the home exceeds the relevant threshold, duty will only be assessed on the value of the home that exceeds the threshold.

Principal place of residence requirement

If the home is intended to be used as a PPR, the principal beneficiary must meet a residence requirement.

The principal beneficiary must:

• move into the home within 12 months of the declaration of trust or settlement, and
• live in the home as their PPR for at least 12 continuous months.

If a change in circumstances means the residence requirement may not be met, you must notify us in writing within 30 days of becoming aware of those circumstances. In limited circumstances, we may vary the residence requirement.

If the residence requirement is not met, the declaration of trust or transfer will be reassessed using the non-PPR dutiable value threshold.

Transfers not covered by the exemption

The exemption does not apply to vacant land or off the plan properties.

At the time of settlement or the declaration of trust:

• there must be a building affixed to the land
• the building must be designed and constructed primarily for residential purposes and may lawfully be used as a place of residence.

The exemption also does not apply where the trustee of a special disability trust purchases a home. The exemption is only available where the home is gifted by an immediate family member of the principal beneficiary. If the trustee purchases a home, other duty concessions or exemptions may apply.