The Victorian Government has announced a land transfer (stamp) duty waiver for purchases of Victorian residential property with a dutiable value of up to $1 million.
- For new residential properties, a 50% land transfer duty waiver of the duty otherwise payable applies.
- For existing residential properties, a 25% land transfer duty waiver of the duty otherwise payable applies.
- For vacant residential land, a 25% land transfer duty waiver of the duty otherwise payable applies.
The waiver applies after all other eligible benefits, such as the first home buyer duty concession, the principal place of residence concession and the pensioner concession, have been taken into account. However, the waiver does not apply to foreign purchaser additional duty.
Is my transaction eligible?
To be eligible for this waiver:
- your purchase must be for residential property, whether or not you use it as your principal place of residence,
- have a dutiable value of $1 million or less,
- the contract must be signed on or after 25 November 2020 and before 1 July 2021, and
- the arrangement must be a bona fide purchase for adequate consideration (not a gift).
The waiver 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 to be used for a commercial or industrial use).
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.
- Vacant residential land described in codes 100 to 109 of the Australian Valuation Property Classification Code (AVPCC).
Definition of a new home
A 'new home' means the same as it does under the First Home Owner Grant Act 2000. It includes a newly built home and a land and building package.
How do I apply?
You or your representative are currently 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 for the purpose of applying the waiver.
The State Revenue Office will apply the waiver automatically if all eligibility criteria are met.
Frequently asked questions about the duty waiver
Is there a threshold?
Yes. The dutiable value of the residential property cannot be above $1 million. Dutiable value is the higher of the consideration paid for the transfer (i.e. usually price) or its unencumbered value. If eligible, the off-the-plan concession can apply to reduce the dutiable value of the property being purchased to below the $1 million threshold.
Will the waiver be available for the purchase of vacant residential land (i.e. house built subsequent to settlement)?
Yes. The waiver applies to a purchase of vacant land. The waiver rate that applies to the purchase of vacant land is 25% of the dutiable value of the land, because vacant land does not meet the definition of a new home.
The 50% waiver is only available for the purchase of a new home. This requires the residence to be built at the time of the transfer.
Can the waiver apply to a gift transfer?
No. The waiver is only available for bona fide purchases of residential property for adequate consideration. Bona fide means ‘genuine’ purchases. Gifts or other transactions which do not involve consideration will not be entitled to the waiver.
Can the waiver apply to a fractional transfer?
Yes, however the unencumbered value of the whole property must not be more than $1 million.
For example, Joe pays $475,000 for a 50% interest in a residential property worth $950,000. Joe will be entitled to the waiver for the transfer of the 50% interest as the value of the property is $1 million or less.
Can the waiver apply to a landholder transaction under Chapter 3 of the Duties Act 2000 (the Duties Act) where the land holdings of the landholder include residential property with a value less than $1 million?
No. The waiver does not apply to a relevant acquisition under the landholder provisions of the Duties Act. The waiver is only available for certain transactions under Chapter 2 of the Duties Act.
Can the waiver apply to the grant or transfer of a dutiable lease under Chapter 2 of the Duties Act?
Yes. The waiver can apply to the grant or transfer of a dutiable lease. The subject site must be land capable of being used solely or primarily for residential purposes and lawfully able to be used in that way, or vacant residential land described in codes 100 to 109 of the Australian Valuation Property Classification Codes.
How long is the waiver available?
The waiver will apply to transfers where the contract to purchase residential property was entered into on or after 25 November 2020 and before 1 July 2021.
Does the transfer have to be completed within the waiver period?
No, it is not necessary for the transfer of the property (i.e. settlement of the purchase) to occur during the waiver period. If the contract for the purchase was entered into during the eligibility period and all other eligibility criteria are met, a transfer after 30 June 2021 will be entitled to the waiver.
Do I have to live in the property as my principal place of residence (my home)?
No. The waiver can apply to the purchase of an investment property. You do not need to live in the property to be eligible.
Can this waiver be applied in conjunction with other concessions?
Yes, the waiver will apply to the land transfer duty payable after all other relevant concessions are applied to the transfer. These may include the:
- first home buyer duty concession,
- principal place of residence concession,
- off-the-plan concession, and
- pensioner concession.
However, the waiver does not apply to any foreign purchaser additional duty payable on the transfer, or transactions that obtain the regional commercial and industrial land concession.
Does the waiver apply to homes purchased off the plan?
Yes. The waiver is applied after land transfer duty (including any concessions such as the off-the-plan concession) is assessed. The dutiable value of the residential property for the purpose of this measure is the dutiable value after the off-the-plan concession is applied.
Please note, the off-the-plan concession is only available if the transfer qualifies for the principal place of residence concession or the first home buyer duty exemption or concession.
Can a foreign purchaser obtain the waiver?
Yes. All purchasers of residential property are entitled to the waiver provided the transfer meets the eligibility requirements. However, the waiver will not apply to the foreign purchaser additional duty component of the land transfer duty calculation.
Does the waiver apply to foreign purchaser additional duty?
No. The waiver does not apply to any foreign purchaser additional duty payable on a transfer. This is paid at the usual rate. The tax relief is applied only to the land transfer duty payable on a transfer if all eligibility requirements are met.
Does the waiver apply to residential property purchased via terms contract?
Yes, however the contract must have been entered into during the qualifying period and all other eligibility criteria met.
Can I obtain the waiver more than once?
Yes, the waiver is not limited to one purchase. Provided your transfer meets all eligibility criteria you can obtain the benefit of the waiver more than once.
I signed a contract of sale subject to finance on 1 November 2020 and my loan was approved on 27 November 2020. Do I qualify for the waiver?
No, the waiver is only available for purchases agreed to during the qualifying period. A contract subject to finance is considered to have been entered into on the date it was signed.
I signed a contract of sale on 27 November 2020 but my settlement will take place on 1 August 2021. Do I qualify for the waiver?
Yes. As the contract was entered into during the qualifying period and provided all other eligibility criteria are met, your transfer will qualify for the waiver.
I have contracted to purchase residential property prior to the commencement of this measure but have yet to settle. Can I sign a new contract to benefit from the waiver?
No, the waiver is only available for purchases agreed to during the qualifying period (25 November 2020 to 30 June 2021 inclusive). A replacement contract does not change when a person agrees to the purchase.