The State Revenue Office has announced a 12 month concession for certain buyers of off the plan properties.
This will apply for contracts signed on or after 21 October, 2024 and signed in the 12 months following that date. Contracts signed prior to 21 October, 2024 will not be eligible.
The Settlement Date is not relevant to the entitlement to the concession – although one has to wonder whether there will be a sunset clause.
The Concession
The Concession is similar in concept to the off the plan concession. That is, the value on which stamp duty will be calculated will be the purchase price of the property less the cost of construction work done after the date of the Contract.
As an example, if the purchase price of the property is $1,000,000 and construction work costing $400,000 is completed after the date of the contract – then stamp duty will be charged on the reduced figure of $600,000. Precisely what might be included and excluded from construction cost isn’t clear at this stage.
The Small Print
On the positive side, the new concession will be available to investors and foreign buyers (Home buyers will remain eligible for the regular off the plan concession). However, foreign buyers will still be liable for the foreign surcharge of 8% of the Purchase Price. There is no requirement that the buyer live in the property under the new concession.
On the negative side, the concession will only apply to strata subdivisions (which is defined to mean there is common property). It also won’t apply to house and land packages.
If construction has begun prior to the signing of the contract, the benefit will be proportionately reduced.
Whilst we have yet to see the final form of the legislation for this concession – you can access the State Revenue Office’s information page by clicking here.
Concluding Comments
Being a cynic, I note a recent article on news.com.au which made the point that Australia may not have a housing supply problem after all. Rather, over the past 14 years 26% of new homes are apartments. Few Australians that aspire to home ownership want to live in an apartment though. You can access the article by clicking here.
The Labour government, in true socialist fashion, will solve the problem. They won’t encourage the construction of more or cheaper houses that people want. Instead, the apartments that homeowners don’t want and are subject to so many building qualify issues will be made cheaper – for 12 months at least.
I wonder whether this program will be an even greater ‘success’ than HomeBuilder?
Next week we will look at how Land Tax and Vacant Property taxes apply to holiday homes.
Lewis O’Brien
Your Preferred Property Lawyer