New residential property with a dutiable value of up to $1 million that is located in the Capital City Zone but outside the Melbourne LGA may be eligible for temporary land transfer (stamp) duty relief:
- New residential properties: 50% relief of the duty otherwise payable is available for new residential properties. This 50% relief applies to contracts entered into from 1 July 2021 to 30 June 2022. It applies after all other eligible benefits – such as the first home buyer duty concession, the principal place of residence concession (including any off-the-plan concession), and the pensioner concession – have been taken into account.
- New residential properties that have remained unsold for 12 months or more: 100% relief of the duty payable is available for new residential properties that have remained unsold for 12 months or more since completion of construction. This relief applies to contracts entered into from 21 May 2021 to 30 June 2022.
Is my transaction eligible?
To be eligible for the relief, your purchase must:
- be for residential property,
- have a new home affixed to the land,
- have a dutiable value of $1 million or less,
- be located in the Capital City Zone but outside the Melbourne LGA (if your property is in the Melbourne LGA you may be entitled to the Melbourne LGA exemption or concession), and
- be a bona fide purchase for adequate consideration (not a gift).
The relief 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 for a commercial or industrial use).
Is my property within the Capital City Zone for the purpose of this relief?
Your property is within the Capital City Zone for the purpose of temporary land transfer (stamp) duty relief if, on this map, it:
- is in the light-blue shaded zone
- is south of the West Gate Freeway
- is marked as CCZ1.
Are there any occupancy requirements that must be met?
It is not necessary that you use the new home as your principal place of residence, which means it can be an investment purchase.
However, depending on the nature of your purchase, there may be occupancy/residency requirements that you have to meet before you can obtain the relief.
To obtain the full relief for unsold properties
To obtain the full relief the new residential property must have remained unsold for 12 months or more. You will be required to provide a copy of an occupancy permit for the new home issued at least 12 months before the contract was entered into.
The property must still be a new home in the sense it has not been previously sold or occupied as a residence or for short-term accommodation since the occupancy permit was issued (essentially, the property was unsold stock).
If the residential property’s dutiable value is reduced to $1 million or less by the application of the off-the-plan concession, the relief will only apply after the off-the-plan residence requirement is met. At least one purchaser must use the property as their home for a continuous period of 12 months, starting within 12 months of possession of the property, which is normally settlement. You will need to contact the SRO after you meet the residence requirement to have the relief applied to your transfer.
This means when an off-the-plan concession is applied any duty payable must be paid within 30 days of settlement, with the taxpayer applying for the relief once the residence requirement is satisfied. In all other circumstances, the relief will be applied up front at settlement.
What is residential property?
Residential property is land capable of being used solely or primarily for residential purposes and that may lawfully be used in that way.
This means the land must have a completed home that you can lawfully live in at the time of the transfer. If the land is a mixed-use property (e.g. a milk bar and house), then the primary use must be residential.
What is a new home?
A 'new home' means the same as it does under the First Home Owner Grant and Home Buyer Schemes Act 2000. The definition includes a newly built home and a land and building package.
The home cannot have been previously sold or occupied as a place of residence or used for short-term accommodation.
How do I apply?
You or your representative are required to provide information about a transaction when lodging the Digital Duties Form. The State Revenue Office will rely on the information disclosed in this form to automatically apply the relief if all eligibility criteria are met.
If an off-the-plan concession reduces the property’s dutiable value to $1 million or less
If the residential property’s dutiable value is reduced to $1 million or less by the application of the off-the-plan concession, the relief will only apply after the off-the-plan residence requirement is met.
Once you have satisfied the residence requirement, which requires least one purchaser to use the property as their home for a continuous period of 12 months, starting within 12 months of possession of the property, you can then apply for the relief.
To apply for the relief:
- contact email@example.com
- include in your email:
- that you are applying for the capital city zone duty relief for an off the plan purchase
- property address and volume and folio
- your name
- SRO reference number (this can be found on your Duty Statement)
- evidence that you have met the residence requirement (e.g. utility bills for the relevant 12 months).
Does this relief apply to foreign purchasers?
While foreign purchasers are also entitled to the relief, provided the transfer meets the eligibility requirements, it does not apply to the foreign purchaser additional duty component of the transaction.