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Stamp duty (“Duty”) Updates

July 19, 2021 by Gessica Giordano

The 3 Duty measures announced in the 2021-2022 Victorian Budget have been introduced by the State Taxation and Mental Health Acts Amendment Act 2021 (Vic) amending the Duties Act 2000 (Vic).

  1. Changes to the eligibility threshold for off-the-plan Duty concessions 

When the off-the-plan Duty concession applies, the dutiable value is the contract price minus the construction costs incurred on or after the contract date which reduces the amount of Duty paid.

For contracts entered into from 1 July 2017 to 30 June 2021 the off-the-plan Duty concessions apply if a purchaser is eligible for:

Following the changes, the off-the-plan Duty concession eligibility threshold has been increased to $1 million for all home buyers who enter into contracts from 1 July 2021 to 30 June 2023.

  1. Duty concession or exemption for City of Melbourne residential property transactions

The following Duty concession and exemption is available to purchasers of new residential properties with a dutiable value of up to $1 million within the City of Melbourne local government area:

The Duty concession and exemption will apply even if the new residential property is purchased for investments purposes.

  1. New Duty rate for property transactions with a value over $2 million

Duty is calculated according to a sliding scale of taxation based on the dutiable value of the property being the greater of the price paid or its market value. This scale starts at 1.4 percent of the dutiable value of the property up to $25,000 and rises to 5.5 percent of the dutiable value of the property exceeding $960,000.

A new rate of Duty has been introduced for high-value property transactions valued at more than $2 million.

For contracts entered into from 1 July 2021, the rate of Duty payable will increase to $110,000 plus 6.5 percent for that part of the dutiable value that exceeds $2 million.

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