The temporary off-the-plan duty concession has been extended to 21 April 2027, reducing duty for eligible apartment and townhouse purchases.
Strata apartments and townhouses temporary concession
Check eligibility and how the temporary concession applies.
Key information
On 21 October 2024, the Victorian Government announced a new temporary off-the-plan land transfer (stamp) duty concession. The Duties Amendment (More Homes) Act 2024, which provides for this concession, received Royal Assent on 19 November 2024.
The new concession is available for off-the-plan purchases of dwellings (including apartments and townhouses) within strata subdivisions that have common property where the contract is entered into on or after 21 October 2024 and before 21 April 2027.
The concession benefits those who are not eligible for the existing off-the-plan concession, which still remains.
The new concession is available to all off-the-plan purchases and allows the purchaser to deduct the construction costs incurred on or after the contract date when determining the dutiable value of the purchaser’s property.
The concession is available to all purchasers, including investors, companies and trusts, meaning there is no requirement to be eligible for either the principal place of residence duty concession or the first home buyer duty exemption or concession.
The existing off-the-plan concession for owner-occupiers and first home buyers continues to apply.
There is no threshold for this concession. The concession is available for apartments, units and townhouses of any value.
Eligible properties
To be eligible, the property must be a lot in a strata subdivision that has common property, such as a shared driveway.
The concession does not apply to house-and-land packages which are not part of a strata subdivision that has common property.
Timing of the concession
Eligibility is based on the date the contract of sale is entered into, not when settlement occurs.
To be eligible, the contract must be signed on or after 21 October 2024 and before 21 April 2027.
Foreign purchaser additional duty
The concession does not apply to foreign purchaser additional duty (FPAD) as this is calculated on the dutiable value of the property before any off-the-plan concession is applied. The off-the-plan concession will only apply to the general land transfer duty liability.
Calculating the concession
The calculation of duty under the new off-the-plan concession will operate similarly to the existing off-the-plan concession.
When the new off-the-plan concession applies, purchasers will be able to deduct the construction costs incurred on or after the contract date from the dutiable value of the property. Land transfer duty will then be calculated on this reduced amount. Other concessions may also apply based on this reduced amount.
Example
Michelle signs a contract to buy an apartment off the plan for $1 million on 1 December 2024, before any construction work has begun. The vendor advises Michelle that $400,000 of the contract price will be spent on constructing her apartment. Michelle intends to rent out her apartment upon construction.
Michelle is able to deduct the construction costs when calculating the dutiable value of the property, which results in the dutiable value coming down to $600,000 ($1 million − $400,000).
If at the time of signing the contract construction was 50% complete, then the construction costs which can be deducted are $200,000 ($400,000 × 50%) and the dutiable value would be $800,000 ($1 million − $200,000).
Michelle is also a foreign purchaser, and therefore has to pay FPAD on this transaction. FPAD will be calculated on the $1 million purchase price.
Frequently asked questions
What if I settle the transaction after the end of the concession eligibility window?
Off-the-plan concession eligibility is determined based on the date you sign your contract.
As long as you sign your contract within the eligibility period, being on or after 21 October 2024 and before 21 April 2027, you will be eligible for the off-the-plan concession regardless of when you settle the transaction.
I signed a contract before 21 October 2024 but the transaction hasn’t settled yet. Am I eligible for this concession?
No, if you signed a contract before 21 October 2024 you are not eligible for this concession.
Applying for the temporary off-the-plan concession
Generally, your conveyancer, solicitor, financial institution or their agent applies for the concession through Duties Online and completing the Digital Duties Form.
Your vendor or transferor or their representative will enter the percentage of construction or refurbishment completed after the contract date and the other details required into the Digital Duties Form, which automatically calculates the concession. Your representative will complete your part of the Digital Duties Form to claim the concession.