Pensioner and concession cardholder duty reduction — contracts signed on or after 1 July 2023

If you are an eligible concession cardholder, including a pensioner, you may be entitled to a once-only exemption or concession from land transfer duty (stamp duty).

If you signed a contract to buy your home before 1 July 2023, different rules apply for the pensioner exemption or concession.

For contracts entered into from 1 July 2023, you may receive:

an exemption from duty — when you buy a home valued at $600,000 or less, or
a concession from duty — when you buy a home valued from $600,001 to $750,000.

The thresholds for the pensioner and concession card duty reduction (the reduction) apply to the total value of the home. This means that if you buy a share in the home (also known as a fractional interest) the thresholds are assessed against the total value of the home, not the value of any share you buy.

If you are buying a home with a foreign purchaser, special rules may apply.

This is a one-off benefit for all the parties who take part in a transaction that attracts this reduction. Anyone who receives the benefit of the reduction, and their partners, will be ineligible to receive it again for another transaction. This is the case even if you weren’t an eligible cardholder at the time of the transaction and are for the subsequent transfer.

If you are buying your first home, you may also be entitled to other exemptions or benefits.

Am I eligible for the duty reduction?

You are an eligible cardholder if you:

hold one of the approved concession cards at the date of the transfer, which is the settlement date
buy the property for market value.

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 vacant land.

You cannot receive the reduction if you received a pensioner duty exemption or concession before 1 July 2023.

Example 1

Kate is an eligible pensioner. She buys her home for $580,000. The current threshold limit for a pensioner exemption is $600,000 so Kate is entitled to the exemption and no duty is paid on the transfer of the property.

Example 2

Sophia is an eligible pensioner. She buys her home for $700,000. Concessional duty applies because the dutiable value of the property is more than $600,000 but not more than $750,000.

Do I need to live at the property?

The property must be used as a principal place of residence by the pensioner or concession cardholder.

If more than one pensioner or concession cardholder buys the property, only one of them needs to meet this requirement (provided that person buys an ownership interest of 25% or more in the property).

Different residence rules apply, depending on the home you buy:

An established home or a home bought off the plan — you must move into the property within 12 months of settlement and live there for 12 consecutive months as your principal place of residence.
Vacant land — you must build a home on the land and live in it as your principal place of residence for 12 consecutive months commencing from whichever of these dates occurs first:
- 12 months of the date you can lawfully live in it, which is usually the date the occupancy certificate is issued, or
- 36 months of the settlement date.

If a change in your circumstances means the residence requirement may not be satisfied, 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 transfer will be reassessed without the reduction.

How the reduction applies

Generally, a full exemption from duty is available for homes valued up to $600,000 and a concession is available for homes valued from $600,001 to $750,000.

The exemption or concession is based on the dutiable value of the property. This is generally the greater of the price paid for the property or its market value, except when the off-the-plan concession applies.

Building on vacant land

For vacant land where you are building a principal place of residence, the exemption or concession is based on the dutiable value of the vacant land only. The cost of the building works is not included.

Off-the-plan homes

For off-the-plan homes, different rules apply to align the reduction with the principal place of residence concession available for the purchase of an off-the-plan home.

The reduction for an off-the-plan property is based on:

the contract price for your property, or
the dutiable value of your property which must be $550,000 or less, including the off-the-plan (OTP) concession

Your vendor will give you the information you need to determine the off-the-plan value of your property for duty purposes.

Dutiable value in this scenario is calculated using information provided by, and a method chosen by, the vendor.

Examples of how the reduction applies to purchases made off-the-plan

Example 3

Sam is an eligible cardholder who buys an apartment off-the-plan as a future home for $800,000. Sam signs the contract before any construction has started. The vendor advises Sam that $300,000 of the contract price will be spent on constructing her apartment.

This means that the off-the-plan value of Sam’s apartment is $500,000 ($800,000 - $300,000).

This is less than the $550,000 threshold for the principal place of residence concession. As a result, the reduction thresholds will be assessed against the off-the-plan (dutiable) value of Sam’s apartment ($500,000).

Accordingly, Sam is entitled to an exemption.

Example 4

In this example, Sam is an eligible cardholder who buys an apartment off-the-plan as a future home for $800,000. Sam signs the contract before any construction has started. The vendor advises Sam that $150,000 of the contract price will be spent on constructing her apartment.

In this example, the off-the-plan value of Sam’s apartment is $650,000 ($800,000 - $150,000).

This is above the $550,000 threshold for the principal place of residence concession and therefore the off-the-plan concession cannot apply.

This means the dutiable value is the contract price of $800,000. As this is above the $750,000 threshold for the reduction, Sam is not entitled to an exemption or concession.

Calculate exemption or concession

Buying a share in a property

If you are an eligible pensioner or concession cardholder and you buy a share in a property rather than the whole property, the thresholds apply to the total value of the property, not the value of your share.

Additionally, at last one pensioner or concession cardholder must own 25% or more of the property.

Duty will be assessed on the total dutiable value of the transfer, not just your share, and all the purchasers are liable for the duty.

How the reduction applies when you buy a share in a property

Example 5

Christos and Molly are both eligible cardholders. They buy their home together for a total price of $590,000.

They each own 50% of the property.

As the threshold limit for this exemption is $600,000, no duty is paid on the transfer of the property.

One or both of Christos and Molly must live in the property for at least 12 consecutive months within 12 months of settlement.

Example 6

Dan and James are both eligible cardholders. They buy their home together for a total price of $720,000. Dan owns 20% and James owns 80%.

Dan’s share of the property is less than 25% but James’ share is 25% or more.

Concessional duty applies because the dutiable value of the property is more than $600,000 but no more than $750,000. Both Dan and James are liable for the duty. James must live in the property for at least 12 consecutive months within 12 months of settlement.

If James was not an eligible cardholder, the exemption or concession would not apply as there is no eligible cardholder buying 25% or more of the property.

Example 7

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 $590,000.

As the threshold limit for this exemption is $600,000, no duty is paid on the transfer of the property.

If the purchase price was $720,000, concessional duty would apply and both Avi and Elizabeth are liable for the duty.

In either case, Avi must live in the property for at least 12 consecutive months within 12 months of settlement.

If Avi’s interest in the property was less than 25%, neither the pensioner exemption or concession would apply as Avi’s share is less than the required 25% to be considered an eligible cardholder and Elizabeth is not an eligible pensioner.

If the purchase price was more than $750,000, Avi and Elizabeth would not be eligible for this exemption or concession as the value of the property is above the thresholds.

Does the reduction apply for related party transfers/nominations?

The exemption or concession is only available to genuine purchasers who paid at least the market price for their home.

This ensures that duty relief does not benefit those who have purchased their home at a discounted price or received the property as a gift.

For all sales between related or associated parties, we require additional 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 six months old, or
- valuation, no more than 12 months old, 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.

Other benefits

Principal place of residence concession

If you are entitled to both this concession and a PPR concession you will automatically benefit from the duty concession for a principal place of residence.

You do not need to claim this concession.

First home buyer benefits

If you are buying your first home, you may also be entitled to certain first home buyer benefits.

First Home Owner Grant

You may be eligible for the First Home Owner Grant regardless of the date you signed your contract.

First home owner duty exemption or concession

You may also be eligible for the first-home owner duty exemption or concession.

However, if you are entitled to receive both the reduction and the benefits available to first home buyers in respect of the same transaction, you must choose one of them. You cannot get both.

To help you make this decision, use our calculators to compare the amounts of duty you will pay after receiving the benefit that each provides.

Remember, the first home buyer duty exemption or concession is only available on the purchase of your first home. It is not available on subsequent home purchases. The pensioner and concession card duty reduction is available to you only once, but the home you buy does not have to be your first home. It may be available for a subsequent home purchase.