Transfer of property to a special disability trust from 1 July 2023

Circumstances/Transactions:

A declaration of trust that establishes a special disability trust (SDT) for no consideration when the declaration takes place on or after 1 July 2023.

Where the dutiable value of the property that is a subject of the declaration is up to and including $1.5 million, duty is chargeable only in respect of the dutiable value of the property that exceeds $1.5 million with respect to the principal place of residence (PPR) of the person or persons with a disability. At the time of the declaration of trust, a building must be affixed to that land that is designed and constructed primarily for residential proposes that may lawfully be used as a residence. 

For property that is a subject of the declaration is not the PPR of the person with a disability, an exemption is available for property up to and including a value of $500,000. If the value exceeds $500,000, duty will be assessed on the amount that exceeds the threshold.

If the dutiable property is not gifted by an immediate family member, this exemption does not apply. Immediate family member of the person with a disability means a natural, adoptive, or stepparent, grandparent or sibling, or a legal guardian of a person under 18.

Transfer of property to a special disability trust before 1 July 2023

Evidence:

For a declaration of trust, this evidence is required:

1. A copy of executed SDT deed.
2. A letter from Centrelink confirming the beneficiary and SDT's current eligibility status.
3. A statutory declaration by the trustee declaring whether the creation of the SDT involved declaring a trust over any dutiable property and if so:
   • whether the dutiable property held by the trust was gifted by an immediate family member, and if so, their relationship to the principal beneficiary, or
   • whether any consideration passed between the trustee of the SDT and the other party, and
   • whether the property held by the trust is intended to be the PPR of the principal beneficiary of the SDT. 
4. Evidence of the value of the property held by the SDT (if any) as at the date of the declaration, by one of these:
   • a letter of appraisal from a licensed real estate agent and a copy of the rates notice, or
   • a valuation by a certified practicing valuer who is a member of the Australian Property Institute (API) or by a member of the Real Estate Institute of Victoria (REIV) with sworn valuer accreditation.