Here are the answers to some frequently asked questions about changes to the first-home buyer duty concession and exemption, included in the State Taxation Acts Amendment Act 2017 which received Royal Assent on 27 June 2017.
You are a first-home buyer. You signed a contract to buy a vacant land prior to 1 July 2017, with settlement after 1 July 2017. You will build your home on the land within 12 months. Do you qualify for the new exemption or concession?
This is an exemption from land transfer duty (commonly known as stamp duty) for first-home buyers who buy a home with a dutiable value of $600,000 or less.
First-home buyers buying a home with a dutiable value from $600,001 to $750,000 will be entitled to a concessional rate of duty, calculated on a sliding scale.
In most cases, the dutiable value of a property is the price you pay for it minus any deductions (such as the off-the-plan concession). If the price you pay for the property is less than market value, the dutiable value will be the market value minus any deductions.
2. How does the concessional rate of duty work?
The concession applies on a sliding scale. The closer the dutiable value is to $600,001, the greater the concession.
You can calculate your duty via our website.
This table gives you a guide on how the concession works.
|Dutiable value||Normal duty||Duty after concession|
The first-home buyer exemption and concession are available for both established and new home purchases.
3. How do you qualify for the exemption/concession?
There are a number of criteria you or the property must satisfy:
Value of the property
The home purchased must have a dutiable value:
- Of $600,000 or less to receive the exemption,
- From $600,001 and $750,000 to receive the duty concession
The dutiable value for a property is generally the greater of its purchase price or market value minus any deductions (such as the off-the-plan concession).
The off-the-plan concession deducts the construction or refurbishment costs incurred after you sign the contract from the contract price.
All purchasers and their partners must meet the FHOG eligibility criteria to be entitled to this duty exemption/concession.
At least one purchaser must use the home as a principal place of residence (their home) for a continuous period of 12 months, starting within 12 months of becoming entitled to possession of the purchased property (this normally occurs at settlement).
4. When will this exemption/concession commence?
The first-home buyer duty exemption and phase-in concession is available for transfers resulting from contracts entered into on or after 1 July 2017.
If you enter into a contract before 1 July 2017 but settle after this date, you will not be eligible for the new first home buyer exemption or phase-in concession. This is because it is the contract date that determines which provisions will apply to a transfer, including where the original purchaser nominates a substitute purchaser.
If you are the purchaser or substitute purchaser under a contract entered before 1 July 2017 you may, however, be eligible for the existing first-home buyer duty reduction.
5. You are a first-home buyer. You signed a contract to buy a vacant land prior to 1 July 2017, with settlement after 1 July 2017. You will build your home on the land within 12 months. Do you qualify for the new exemption or concession?
No. For duties purposes, the relevant transaction is the transfer of land. As the date you signed the contract to purchase the land was before 1 July 2017 the new exemption or concession will not apply. You may however obtain the existing first-home buyer duty reduction, subject to you meeting all relevant criteria for the concession.
6. You and your partner are buying a home. It is the first home for both of you. You have a concession card but your partner does not. How will the new duty exemption / concession apply?
Concession cards do not affect the first home buyer duty exemption / concession.