Temporary Off-The-Plan Duty Concession: What You Need to Know
Overview of the Temporary Off-The-Plan Duty Concession
Key Takeaways
Broad eligibility: The concession applies to all purchasers, including investors, companies, and trusts.
Strata subdivisions only: Eligible properties must have shared common areas like driveways.
On 21 October 2024, the Victorian Government introduced a temporary off-the-plan land transfer (stamp) duty concession, aimed at boosting housing development and affordability. The Duties Amendment (More Homes) Act 2024 was passed on 19 November 2024, officially enacting this measure.
This concession applies to off-the-plan purchases of dwellings within strata subdivisions that include common property, such as shared driveways, and covers contracts signed between 21 October 2024 and 21 October 2025.
The concession offers benefits to purchasers, including investors, companies, and trusts, who are not eligible for the existing off-the-plan duty concession for owner-occupiers and first-home buyers, which remains unchanged.
For more details on how stamp duty impacts property transactions, visit our comprehensive stamp duty guide.
How Does the Concession Work?
The new concession allows purchasers to deduct construction costs incurred after the contract date when calculating the dutiable value of their property. Here’s how it works:
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The property must be a lot in a strata subdivision with common property.
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House-and-land packages or other properties not part of a strata subdivision are excluded.
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Purchasers can deduct eligible construction costs from the total property value to determine the reduced dutiable value.
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This reduced amount is used to calculate land transfer duty (stamp duty).
For expert advice on navigating strata property purchases, explore our property law case studies.
Eligibility Requirements
To qualify for the temporary off-the-plan concession:
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The property must be a dwelling in a strata subdivision with common property.
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The contract of sale must be signed on or after 21 October 2024 and before 21 October 2025.
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Contracts signed before 21 October 2024 or for properties without common property are ineligible.
Additionally:
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The concession applies to all purchasers, including investors, companies, and trusts.
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Purchasers do not need to qualify for the principal place of residence duty concession or the first home buyer duty exemption or concession.
For more information on property law compliance, visit our property lawyers page.
Timing of the Concession
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Eligibility is determined based on the contract date, not the settlement date.
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Contracts signed before the commencement date of this concession are not eligible, even if settlement occurs during the eligibility period.
👉 “This concession offers significant benefits for off-the-plan buyers, but timing is critical. Ensure your contract falls within the eligibility window.” – Wisam Assi, Principal Lawyer, Optimum Lawyers
Foreign Purchaser Additional Duty (FPAD)
It’s important to note that the temporary off-the-plan concession does not apply to Foreign Purchaser Additional Duty (FPAD). FPAD is calculated based on the property’s dutiable value before the off-the-plan concession is applied.
For more guidance on handling FPAD, check out our foreign purchaser duty resources.
Calculating the Concession
The calculation process is similar to the existing off-the-plan concession:
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Determine the total property value.
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Deduct eligible construction costs incurred after the contract date.
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Calculate stamp duty based on the reduced dutiable value.
Example
Michelle signs a contract to buy an off-the-plan apartment for $1 million on 1 December 2024, before construction begins. The vendor estimates that $400,000 of the contract price will be spent on construction.
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Michelle’s dutiable value = $1,000,000 – $400,000 = $600,000
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If construction is 50% complete at the time of signing, the deductible amount = $400,000 × 50% = $200,000
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Dutiable value in this case = $1,000,000 – $200,000 = $800,000
As Michelle is a foreign purchaser, she will also pay FPAD based on the $1 million purchase price.
For more examples on calculating duty savings, see our stamp duty case studies.
Frequently Asked Questions
1. What if I settle after the concession eligibility window ends?
Your eligibility is based on the date you sign the contract. As long as you sign within the eligibility period (21 October 2024 to 21 October 2025), you qualify, regardless of when settlement occurs.
2. I signed my contract before 21 October 2024 but haven’t settled yet. Am I eligible?
No. Contracts signed before 21 October 2024 are not eligible for this concession, even if settlement occurs during the eligibility period.
3. What happens if I settle before the concession is legislated?
In rare cases where settlement occurs before the concession becomes law, you must pay the full stamp duty at settlement. Once the measure is legislated, you can apply for a refund.
4. How do I apply for the concession?
Applications are typically handled by your conveyancer, solicitor, or financial institution through Duties Online. Your vendor or their representative will provide the required construction details in the Digital Duties Form to calculate the concession.
Learn more about the application process on our conveyancing services page.
My Final Thoughts
The temporary off-the-plan duty concession offers a valuable opportunity for purchasers of strata-subdivision dwellings, providing significant stamp duty savings. Whether you’re an investor or a company, understanding how to take full advantage of this concession is essential.
At Optimum Lawyers, we specialise in property law and can guide you through the complexities of the Victorian duty concessions. Contact us today to discuss your situation or visit our property law page for more information.
👉 “Navigating stamp duty concessions can be tricky. Let our team of experts ensure you maximise your benefits.” – Wisam Assi, Principal Lawyer, Optimum Lawyers
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