Special disability trusts from 1 July 2023

Circumstances/Transactions:

A transfer of dutiable property to the trustee of a special disability trust (SDT) for no consideration when the transfer takes place on or after 1 July 2023.

An exemption is available where the dutiable value of the property subject to the transfer up to and including $1.5 million with respect to the principal place of residence (PPR) of the person or persons with a disability. If the value exceeds $1.5 million, duty will be assessed on the amount that exceeds the threshold. At the time of the declaration of trust or transfer, 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 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.

Special disability trusts before 1 July 2023

Evidence:

For a transfer of land, this evidence is required:

1. The Digital Duties Form.
2. A copy of the duly stamped SDT deed together with any subsequent amendments.
3. A statutory declaration by the trustee declaring:
   • Whether the transfer is part of a sale or other arrangement under which consideration passed between the transferor and the trustee of the SDT.
   • Whether the dutiable property was gifted by an immediate family member of the principal beneficiary, and if so, their relationship to the principal beneficiary.
   • Whether the property is intended to be the PPR of the principal beneficiary of the SDT.
4. Evidence of the value of the property as at the date of the transfer, by one of these:
   • 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.
   • A letter of appraisal from a licensed real estate agent and a copy of the relevant rates notice. 
5. A copy of a written determination that the beneficiary of the SDT meets the impairment or disability conditions for a special disability trust, from:
   • Services Australia under section 1209M of the Social Security Act 1991 (Commonwealth); or
   • the Department of Veterans’ Affairs under section 52ZZZWA of the Veterans’ Entitlement Act 1986 (Commonwealth).

The above determination must have been made prior to the date of the transfer.