Everything You Needed To Know About The Upcoming Off-The-Plan Stamp Duty Concession Changes

May 17, 2017 | Property investing, stamp duty

Whether you’re purchasing an Australian property for personal use or investment, you’ll no doubt have resigned yourself to the reality of having to pay a costly Stamp Duty. Thankfully, there are concessions, but in a few months there will be a change to the off-the-plan stamp duty concessions available to Victoria property purchases.

From July, those investing in a non-residential development won’t be eligible for this concession if the contract of sale is made after the date. Only first-time home buyers purchasing a property valued at $750,000 or less will benefit, and first time home buyers purchasing a property of less than $550,000 will be entitled to a principal place of residence stamp duty concession.

So if you don’t fall into the above categories, what else do you need to know?

If your aim was to make an investment purchase in Victoria, you should be aware that from next year the Vacant Residential Property Tax will also come into effect, as part of local government’s aim to make more properties available to buyers and tenants for actual residential use by annually taxing vacant residential properties in an amount equal to 1% of its Capital Improved Value. This means that if you’re considering finalising an investment after these dates you will need to sit with your property manager and advisor and discuss your rental options, as you will incur the fee if your property lies vacant for six months or longer.

Furthermore, if you are planning to transfer the investment property to your spouse in order to escape paying tax, you will also no longer be able to take advantage of this loophole after July 1^st.

While details of the law are yet to be finalised, it would be in your best interest to clarify the status of your off-the-plan investment purchase as soon as possible so that you aren’t saddled with any unexpected costs in the future. By sitting down and discussing your needs and expectations with one of our team at an organisation like the Aussie Property Group, you will be prepared for whatever happens.