UPDATE –> Stamp Duty Concession Update 1 July 2013

Summary

From 1 July 2013 First home buyers will receive $10,000 if they purchase a new home (off the plan, land and building, etc). First home buyers will be entitled to a 40% reduction on stamp duty (subject to eligibility – see below). The stamp duty reduction is a stamp duty concession which is on top of to the primary place of residence concession, if applicable.

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First Home Buyers Grant

For newly built houses under $750,000, the First Home Owner Grant (FHOG) will increase from $7000 to $10,000 from 1 July 2013. The changes to the FHOG apply to first-time home buyers who sign an agreement to build or purchase a new home on or after 1 July 2013. Please note that you may still be eligible for the FHOG if you have previously purchased real estate but did not (1) previously receive the grant; and (2) did not live in that property as your principal place of residence (i.e. you purchased the property as an investment only).

According to the government’s statement, the existing FHOG for buying an established home will end on 1 July 2013. Buyers are required to sign a contract of sale prior to or on 30 June 2013 in order to receive the FHOG on an established home.

First Home Buyer Stamp Duty Reduction

For homes worth up to $600,000, whether established or newly constructed, the first home owner’s stamp duty reduction will increase to 40 per cent from 1 July 2013. For example, where full stamp duty is $20,000 then the concessional stamp duty will equate to $12,000 ($20,000 less $20,000 multiplied by 40/100).

Another 10 per cent duty reduction will be available for eligible first-time home buyers from 1 September 2014, which increases the overall stamp duty saving to 50 per cent.

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Pensioner concession

Concession card holders (Pensioner Concession, Health Care, Repatriation Health and Commonwealth Seniors Health cards) may benefit from stamp duty concessions or even an exemption depending on the purchase price, among other things.

Off-the-Plan Sales concession

There is a concession offered, to buyers who purchase property “off-the-plan”. This is applicable to purchases of land, newly built apartments, townhouses, renovated lots and house and land building packages. They are titled off-the-plan as they purchases of property which have not been entered into the Land Titles Office’s register of land and property. Therefore purchasers of off-the-plan property are buying land and property according to the vendor’s drawn plans (which are intended to be registered in the future).

The concession is calculated using various formulas set by the State Revenue Office. It can be summarised as being calculated based on the renovation or construction cost, which take place after the day of signing the contract of sale and subtracting the cost of the renovation or construction from the purchase price. At the time of purchase the concession or stamp duty savings are estimates only. Estimates on stamp duty at the time of purchase can differ significantly to the actual stamp duty payable at the time of settlement.

Land and building package concession

A land and building package concession applies when a purchaser signs (1) a contract to purchase land and (2) a contract to construct a new building such as a house, apartment or townhouse. This differs to an off-the-plan sales concession as it can apply irrespective of whether the plan of the land and property is registered or not.

The concession applies to purchases of property within a multi-lot development (such as an apartment in a residential tower) or a single lot development (for instance a suburban house and land package)

The construction is assumed to be incomplete or it has not been started yet at the contract date.

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