Your Property Purchase & Stamp Duty Reduction
Posted by Madhu Warnakulasuriya on : Wednesday, January 23, 2013
Are you a property purchaser after 01 January 2013? Here is a good news for you.
Your Stamp Duty for the property purchase is reduced up to 30% now.
Reduction of Duty for Eligible First Home Buyers
What is the reduction of duty for eligible first home buyers?
For dutiable transactions with a settlement date on or after 1 July 2011, land transfer duty will be reduced for eligible first home buyers purchasing a principal place of residence (PPR) valued at not more than $600,000. To be eligible for the duty reduction, the first home buyer must have received or be entitled to receive the First Home Owner Grant and must also reside in the property for a continuous period of 12 months commencing within 12 months of settlement.
The duty reduction of 50 per cent will be phased in over four years, with a 20 per cent reduction on 1 July 2011, followed by additional 10 per cent reductions on 1 January 2013, 1 January 2014 and 1 September 2014.
Duty savings to first home buyers
An eligible first home buyer will still be entitled to a duty reduction where they entered into a contract to purchase their first home before 1 July 2011, as long as settlement occurs on or after that date.
For dutiable transactions with a settlement date on or after 1 July 2011, the purchaser may be entitled to the reduction of duty if they:
- have received or are entitled to the First Home Owner Grant for the purchase of the property
- reside in the property as their PPR for a continuous period of at least 12 months commencing within 12 months of becoming entitled to possession of the property (which usually occurs at settlement).
Where there are two or more purchasers, at least one of them must satisfy the above residency requirement. However, it is not necessary for the same purchaser to occupy the home for the whole 12 months.
If these requirements are not met, duty may be assessed at the standard rate. The Commissioner of State Revenue (the Commissioner) may exercise his discretion to vary the residence requirement where he is satisfied that there is a good reason for doing so.
Furthermore, land will not be considered to be occupied as a PPR unless there is a building on the land that, in the Commissioner's opinion, is designed and constructed primarily for residential purposes and may lawfully be used as a PPR. If you have received the PPR concession, you must notify the Commissioner in writing, of any changes in your circumstances that will result in the residence requirement not being met.
How do I apply for the concession?
For transfers settled on or after 1 July 2011, please use SRO Duties Form 53B - Principal Place of Residence (PPR) Concession and First Home Buyer Duty Reduction Statutory Declaration.
Election to receive reduction of duty for eligible first home buyers or pensioner exemption/concession.
If you qualify for the reduction of duty for eligible first home buyers you may also be eligible for the pensioner exemption or concession.
If you qualify for both the duty reduction and the pensioner exemption or concession, you must elect to receive one or the other. You cannot receive both. If you do not make an election you will automatically receive the duty reduction.
Please remember your First Home Bonus $13,000.00 has ended on 30 June 2012. However you are still eligible for the First Home Owners Grant $7,000.00 along with the Stamp Duty reduction 30%.
Source- State Revenue Office Victoria
BARRISTER AND SOLICITOR,