Stamp Duty and Regulatory Changes – what’s going on?

The 1st of July has seen the introduction of a number of regulatory changes around stamp duty calculations for first home buyers, investors, off the plan purchases etc.

It can be very confusing if you are new to buying property; often family and friends will offer advice and opinions with the best of intentions and may insist their information is correct. And sometimes it is, however in an ever-changing environment and with a regulatory body insistent on trying to slow real estate growth (and or the economy) these changes are frequent and interpretation of the changes can be challenging at times.

So here we will try to simplify things for you.

First Home Buyers;

If you are buying your first home, you will not be subject to ‘any’ stamp duty applicable to the purchase up to a purchase price of $600,000. Once you get over $600,000 then a sliding scale to $750,000 will determine how much stamp duty is payable. Important to note; if you are buying with your partner, and they have owned property in the past (jointly or otherwise) then you will not qualify for any stamp duty concessions

Off the Plan Purchases (OTP);

If you purchase a property ‘Off the Plan’ (OTP) and you are buying as your owner-occupied home (PPR - Principle Place of Residence) then you will still qualify for stamp duty concessions (calculated on land component only) to $600,000 for PPR or $750,000 first home buyers PPR.

If you are buying as an investment (you are not going to live in it permanently), then you will not qualify for any stamp duty concessions. This also applies if you are buying for a family member to live in it rent free (e.g. going to university to study) as ultimately, you will either rent it out to someone else, or sell it and possibly make a profit, which then becomes taxable.
Be careful of some clever OTP sales agents offering creative solutions to get you to sign up (say you are buying as PPR but rent it out anyway and say you changed your mind after it settled). The relevant authorities policing this activity will most likely let you get away with it for the first year, possibly even extend to the second year to see what you do, but they will eventually come down on you like a tonne of bricks for tax evasion etc. Be warned!
The PPR residence requirement is simple;

  • You must occupy the property for a continuous and minimum of twelve months within twelve months of the settlement date (all bills, ID docs etc. to show new address)
  • If two owners – at least one must meet the above PPR Residence requirement

First Home Owners Grant (FHOG)

  • First home buyers building a new home will get stamp duty exemption and FHOG ($10k metro, $20k regional) to $600,000
  • Where total price is more than $600,000 then stamp duty concession applies up to $750,000 and still get FHOG ($10k metro, $20k regional)  

There are also changes around transfers of properties to spouses. These are no longer eligible for stamp duty exemption; however, this will not apply in the case of divorce or PPR gifted to spouse where no money is being paid.

It is always advisable to speak to someone that is fully accredited and up to date in providing these services. So, if you would like further information on this, call me on 0438 041 111 and I will be happy to discuss or call your legal representative and seek their advice.

As always, enjoy life, work hard, play safe and remember that we are always here to help you

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