Pensioner and concession cardholder duty reduction (contracts from 1 July 2023)

Key information

If you are an eligible concession cardholder, including a pensioner, you may be entitled to a one-off reduction in land transfer duty when you buy a home.

For contracts entered into from 1 July 2023:

• an exemption from duty applies if the property value is $600,000 or less
• a concession from duty applies if the property value is from $600,001 to $750,000.

The thresholds apply to the total value of the home, even if you only buy a share.

You can only receive this reduction once. If you are buying your first home, you must choose between the pensioner duty reduction and the first home buyer duty benefits. Whichever you choose, you may still be eligible for the First Home Owner Grant.

Eligibility

You are eligible for the reduction if you:

• hold one of the approved concession cards at the date of the transfer (settlement)
• buy the property for market value
• intend to live in the home as your principal place of residence.

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 for an earlier transaction. In a joint purchase, anyone who receives the benefit is treated as having used their one entitlement. This applies even if you were not a cardholder at the time of the earlier transaction.

Residence requirement

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 the property, which is usually the date the occupancy certificate is issued, or
  • 36 months of the settlement date.

If your circumstances change and you may not meet the residence requirement, you must notify us in writing within 30 days of the change in circumstances.

In limited circumstances, we may vary the residence requirement.

If you do not meet the residence requirement, we will reassess the transfer without the reduction. 

Calculating the duty reduction

Generally, a full exemption from duty applies for homes valued up to $600,000 and a concession applies 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. 

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 concession.

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

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

Buying a share in a property

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

At least one pensioner or concession cardholder must own 25% or more of the property. 

Duty is 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

Related party transfers

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 purchase their home at a discounted price or receive it as a gift.

For all sales between related or associated parties, you must provide additional evidence that you 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 6 months old, or
  • valuation by a certified practising valuer who is a member of the Australian Property Institute or the Real Estate Institute of Victoria with sworn valuer accreditation that is no more than 12 months old.

Apply for a pensioner exemption or concession