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Stamp Duty Concessions – Are You Eligible?

stamp dutyAn article from our Understanding Property Law series

When land is transferred in Victoria, a purchaser is required to pay stamp duty to the State Revenue Office (SRO).   How that the stamp duty is charged and the amount that is charged will depend on each individual transaction.  The State Revenue Office offers several concessions and exemptions that purchasers may be able to take advantage of.

Three of the more common exemptions or concessions are briefly detailed below, although please note that this is not an exhaustive list.  You are invited to contact a solicitor at our office should you have any queries regarding your particular purchase.

  1. Principal Place of Residence Concession

The principal place of residence (PPR) concession is a concession that may be available to a purchaser if they intend to live in the purchase property as their main residence.

To be eligible, a purchaser must satisfy the following criteria:

(a)   They must live in the property for a continuous period of 12 months, starting at a time that is within 12 months of becoming entitled to possession of the property (normally the settlement date); and

(b)   The purchase price of the property must be between $130,000 and $550,000.

If there are two purchasers, at least one needs to satisfy the residency requirement, although the 12 month continual occupation can be shared between purchasers.

After receiving a PPR concession, if a purchaser then believes that the requirements will not be met, they must notify the Commissioner of the State Revenue Office within 30 days.  Failure to notify within the prescribed time limit may result in a penalty.

  1. First Home Buyer’s Reduction

For contracts entered into on or after 1 July 2013, the First Home Owners Grant (FHOG) is limited to the buyers of new homes only.  However, if the only reason you cannot now apply for the FHOG is because you are purchasing an established home, then you may still be eligible to receive the First Home Buyer’s Reduction.

This reduction may be available if:

(a)   The purchase price (which should be market value) is more than $130,000, but not more than $600,000;

(b)   You meet the residency requirements for the PPR concession (see above);

(c)    You or your spouse/partner have not previously owned residential property (either jointly or separately) before 1 July 2000 in Australia;

(d)   You or your spouse/partner have not previously occupied a residential property for a continuous period of at least 6 months that you have an interest in on or after 1 July 2000;

(e)   You are a natural person who is at least 18 years old; and

(f)     You or your spouse/partner have not previously received the FHOG.

To discuss whether you are eligible for this reduction, please contact our office.

 

  1. Pensioner Concession or Exemption

If you hold a valid pensioner concession or health care card, you may be entitled to a concession on the stamp duty attributed to your purchase.

To be eligible you would need to hold one of the following cards (which must be valid at the settlement date):

(a)   Health Care Card (Department of Human Services);

(b)   Health Care Card (pre September 2012) – Centrelink;

(c)    Repatriation Health Card (Department of Veterans’ Affairs);

(d)   Pensioner Concession Card (DHS or Department of Human Services or Department of Veterans’ Affairs);

(e)   Pensioner Concession Card (pre August 2012) – Centrelink; or

(f)     Commonwealth Seniors Health Card (DHS or Department of Human Services or Department of Veterans’ Affairs).

As well as being a primary card holder of a valid concession or health care card, a purchaser must also purchase the property for market value, and intend to live in the property as their principal place of residence (see requirements above).  A purchaser can only receive this concession once.

The concession amount will depend on the value of a person’s interest in the property.  Currently, a person’s interest must be less than $750,000 in order to claim a benefit.  If a person’s share is $330,000 or less, they will be entitled to a full exemption in stamp duty.

Note that a person’s interest is not necessarily the same as the value of the property.

Example 1:  Mark and Mary buy a property for $800,000.  Mark has a valid concession card, but Mary does not.  Mark’s share of the property is $400,000.  As the value of his share of the property is between $330,000 and $750,000, he will be eligible for a concession on his stamp duty.

Example 2: Kevin and Stacey buy a property for $660,000.  They are both primary card holders of valid health care cards.  Each of their shares is $330,000 or less, and accordingly, they both receive a full exemption on stamp duty.

Example 3: Steven buys a property for $760,000. His share of the value of the property is $760,000, which is over the threshold.  He is not entitled to this concession.

To discuss the stamp duty payable on your transaction, feel free to contact a solicitor at our office on (03) 8631 4444.

Property Law Advice

These articles are general in nature and may not apply to your specific situation. For  more detailed property law advice we recommend seeking legal advice from a property law lawyer. The Property Law team at Astuto Lawyers can be contacted on (03) 8631 4444 or by completing the following form:

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