Changes to Stamp Duty


First home owner proposed changes:

Good news for first home buyers, as of 1/07/2017 beneficial changes will be made to the first home buyers stamp duty concessions.

Currently first home buyers are eligible for a 50% discount on stamp duty for any property they purchase under $600,000. As of 01/07/2017, first home buyers will be eligible for a 100% discount on stamp duty for any property purchase less than $600,000.

For any property purchase between $600,000 and $750,000, eligible first home buyers will be entitled to a substantial discount on any stamp duty payable.
In order to be eligible for the exemption, you must be eligible for the first home owners grant, ie:

-Must have not received the FHOG prior
-At least one applicant must be an Australian citizen or permanent resident (or from NZ)
-AT least one of the applicants must live in the property for a continuous period of 12 months, starting no longer than 12 months of settlement (or completion of construction).

Should you enter into a contract before 1/07/2017 but settle after 01/07/17 unfortunately you will be bound by the old stamp duty concession entitlements as for stamp duty purposes, contract date is taken.

FHOG regional changes:

In additional to the first home buyer stamp duty changes, the FHOG will also be increasing from $10,000 to $20,000 for regional purchases.

FHOG is only available to new houses ie:
-Newly constructed dwellings
-Dwellings sold for the first time as a new premises
-Land and house packages
-Vacant land in which you build a new home

Please visit your local accounting firm Melbourne for a list of regional locations.

Defence for amendments for stamp duty exemptions and FHOG.

Whilst the new proposed changes are very beneficial for most first home buyers, many of our defence force members may not have the luxury or residing in their first home for a full twelve months due to their service requirements. As a result the 12 months continuous requirement will be lifted.

Off the plan concession changes:

Previously off the plan properties were subject to no capital gains, however as of 01/07/2017, there will be certain conditions which need to be met in order to receive off the plan stamp duty exemptions.

1: The property must be your principal place of residence (ie you must spend 12 continuous months in your property beginning within 12 months of settlement/construction completion).
2: The property must be under the dutiable levy:
-For non-first home buyers, the property must be under $550,000 to qualify
-For first home buyers, stamp duty is exempt for property under $600,000 and is phased in slowly for houses from $600,000 to $750,000 (no concessions for property over $750,000).
Effectively there will be no stamp duty concessions for investment property and a cap on off the plan property stamp duty exemptions (effective 01/07/2017).

Proposed vacant property tax:

It is proposed that any property situated in the inner suburbs of Melbourne which are unoccupied for more than six months of the year (does not need to be continuous) will be subject to an “unoccupied tax.”

The proposed tax will be implemented as of the 01/01/2018 and will be calculated on the value of the property as a percentage (1 % of the capital improved value).

Exemptions will be applied to the following:
-Holiday homes
-City dwellings used for work purposes
-property transfers
-new residential properties

Dwellings will be considered a holiday home if:

-The landowner had a ppr in Australia the prior year
-It is deemed a genuine holiday home

Dwellings will be considered “used for work purposes” if:

-The property is occupied for 140 days or more during the year
-The land owner had a ppr in Australia the prior year
-The owner’s place of work must be in one of the specified areas

New properties and properties transferred to a new owner will be exempt from paying tax for the following year.

The tax levy will not be applied to your tax return but issued from the state revenue office (unfortunately your accountant will not be able to lower any taxes payable).

For more information on locations which will be subject to the new “unoccupied tax” please visit your accountant south yarra for more details.

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