Off-The-Plan Stamp Duty Concession Victoria

If you are comparing new apartments in Melbourne, stamp duty can make a meaningful difference to the amount you need to budget for a purchase. For buyers considering an off-the-plan apartment or townhouse, Victoria's temporary off-the-plan stamp duty concession can reduce that upfront cost by changing the value on which duty is calculated.

The key point is that you generally don't receive a simple percentage discount on stamp duty. Instead, you can deduct eligible construction costs incurred after you sign your contract when determining the property's dutiable value.

That means timing matters. The earlier in construction you purchase, the greater the amount of future construction that may remain to be deducted.

Victoria's temporary expanded concession is currently available for eligible contracts entered into on or after 21 October 2024 and before 21 April 2027. It can apply to eligible apartments and townhouses in strata developments regardless of purchase price and is available to owner-occupiers, investors, companies and trusts.

Here is what Melbourne buyers need to know.

The off-the-plan stamp duty concession in 30 seconds

Normally, land transfer duty, commonly called stamp duty, is calculated using the property's dutiable value. This is generally the purchase price or market value if the market value is higher.

With an eligible off-the-plan purchase, however, construction costs incurred after the date you sign the contract can be deducted before duty is calculated.

For example, imagine you sign a contract while a significant proportion of an apartment building is still to be constructed. Instead of duty automatically being calculated on the finished apartment's full contract price, the eligible future construction component may be removed from the calculation.

The result is a lower dutiable value and potentially a lower stamp duty bill.

There is no universal rule that your dutiable value will become a particular percentage of the purchase price. The result depends on factors such as how much construction has been completed when you sign and which calculation method the developer uses.

This is why two people buying similarly priced apartments at different stages of the same development may have different stamp duty outcomes.

What changed in Victoria and when does the concession end?

Victoria temporarily expanded its off-the-plan concession for eligible strata properties from 21 October 2024.

One of the biggest changes was removing the usual property-value threshold for the temporary concession. Eligible apartments, units and townhouses can qualify regardless of their price. It was also expanded beyond buyers purchasing a principal place of residence.

That means the temporary concession can be available to investors as well as owner-occupiers. Companies and trusts may also qualify where the relevant requirements are satisfied.

To qualify under the temporary concession, the property must generally be an off-the-plan dwelling in a strata subdivision with common property. This can include apartments and qualifying townhouses. Standalone house-and-land packages that are not part of a strata subdivision with common property do not qualify under this temporary measure.

Most importantly, the contract date determines eligibility.

The temporary concession currently applies to eligible contracts entered into before 21 April 2027. Your settlement can occur later because the settlement date itself does not determine eligibility for this temporary concession.

For buyers already pricing an apartment purchase, this makes the contract date an important part of the decision rather than something to think about only when settlement approaches.

What could the stamp duty saving look like?

Worked examples are useful, but they need an important qualification.

The State Revenue Office provides two methods for calculating an off-the-plan concession: the fixed percentage method and the alternative method. The developer chooses the method used for the development and both rely on information that buyers will not normally have themselves.

The following examples are therefore illustrations only. They are not stamp duty quotes for a particular Norus apartment.

To demonstrate the principle, the examples assume the fixed percentage method for a multi-lot building of four or more storeys. Under that method, 75% of the contract price is treated as the construction component. The examples also use general Victorian land transfer duty rates before any additional first home buyer or principal place of residence benefits.

Example: $499,000 Riverbend apartment

Imagine an apartment with a contract price of $499,000 and assume 40% of construction has been completed at the contract date.

Under this illustration, 60% of construction remains.

• Contract price: $499,000
• Estimated future construction deduction: $224,550
• Illustrative dutiable value: $274,450
• PPR stamp duty without the off-the-plan concession: approximately $21,910
• PPR stamp duty on the illustrative reduced value: approximately $10,093
• Illustrative PPR stamp duty saving: approximately $11,818
• Eligible first home buyer stamp duty: $0*

Now consider an apartment with a contract price of $705,000, again using an illustrative 40% construction-complete assumption.

• Contract price: $705,000
• Estimated future construction deduction: $317,250
• Illustrative dutiable value: $387,750
• Stamp duty for a PPR buyer without the off-the-plan concession: approximately $37,370
• PPR stamp duty on the illustrative reduced value: approximately $15,758
• Illustrative PPR stamp duty saving: approximately $21,613
• Eligible first home buyer stamp duty on the illustrative reduced value: $0*

This example also shows why first home buyers should look beyond the headline purchase price. If the final SRO-assessed off-the-plan dutiable value falls to $600,000 or below and the purchaser meets the first home buyer eligibility requirements, a full first home buyer duty exemption may potentially apply.

Example: $469,000 Parkview apartment

For this example, assume an apartment with a contract price of $469,000 is purchased when 20% of construction is complete.

• Contract price: $469,000
• Estimated future construction deduction: $281,400
• Illustrative dutiable value: $187,600
• PPR stamp duty without the off-the-plan concession: approximately $20,110
• PPR stamp duty on the illustrative reduced value: approximately $5,750
• Illustrative PPR stamp duty saving: approximately $14,360

• Eligible first home buyer stamp duty: $0*

These figures show the mechanics rather than what any individual buyer will pay. Construction progress, the developer's calculation method, your intended use of the property and other concessions can change the final result.

Always ask your conveyancer or solicitor to confirm the duty applying to your individual purchase before relying on an estimate.

Who qualifies for Victoria's temporary off-the-plan concession?

The temporary concession is broader than many buyers realise.

For qualifying strata properties, it can currently be available to:

• owner-occupiers
• investors
• first home buyers
• companies
• trusts.

There is no purchase-price threshold for the temporary concession. However, other concessions you may wish to combine with it can have their own eligibility rules and thresholds.

What about first home buyers?

This is where the numbers can become particularly interesting.

Eligible Victorian first home buyers currently pay no land transfer duty where the relevant dutiable value is up to $600,000. A concession applies where the dutiable value is between $600,001 and $750,000.

For an eligible off-the-plan purchase, the first home buyer thresholds may be assessed after the off-the-plan concession has reduced the dutiable value.

This means a first home buyer could potentially purchase an apartment with a contract price above $600,000 but still have a dutiable value below $600,000 once eligible future construction costs are deducted. If all other first home buyer requirements are met, they may then qualify for the full duty exemption. The SRO provides examples demonstrating this interaction.

On the other hand, a first home buyer purchasing an apartment below $600,000 may already qualify for a full duty exemption without needing the temporary concession to reduce their duty further.

So while off-the-plan stamp duty savings can be significant, they should always be considered alongside the buyer's individual eligibility.

How do you claim the concession?

For most buyers, claiming the concession is not a process you need to calculate and lodge yourself.

The developer or vendor provides the information required to determine the construction component and dutiable value. Your solicitor, conveyancer, financial institution or their representative will normally handle the relevant duty documentation through Victoria's Digital Duties system.

When you appoint your conveyancer, make sure they know you are purchasing an off-the-plan property and ask them to confirm:

• whether the temporary off-the-plan concession applies
• the dutiable value supplied for your property
• whether you qualify for a first home buyer exemption or concession
• whether any principal place of residence concession may also apply
• the estimated land transfer duty payable at settlement.

The SRO notes that the vendor generally advises the purchaser's conveyancer or solicitor of the property's dutiable value after applying the concession as settlement approaches.

Why buying earlier can mean a bigger saving

The basic principle is straightforward: the off-the-plan concession applies to eligible construction costs incurred after the contract date.

So when more construction remains to be completed after you sign, there is potentially more construction cost available to deduct.

As the building moves closer to completion, more work has already occurred before your contract date. That usually means a smaller future construction component remains to be deducted.

The SRO illustrates this using an $800,000 high-rise apartment. In its example, 20% of construction has been completed when the buyer signs. Under the fixed percentage method, the remaining construction reduces the property's dutiable value to $320,000.

Frequently asked questions

When does Victoria's temporary off-the-plan stamp duty concession end?

Under the current rules, eligible contracts must be entered into on or after 21 October 2024 and before 21 April 2027. Settlement can occur after this date because eligibility is based on the contract date.

Can investors claim the off-the-plan concession?

Yes. The temporary concession is available to qualifying purchasers, including investors, companies and trusts. You do not need to intend to live in the property to access this temporary measure.

Is there a maximum property price?

There is no property-value threshold for the temporary off-the-plan concession applying to eligible strata apartments, units and townhouses. Other concessions such as first home buyer benefits have separate thresholds.

Can a first home buyer use both concessions?

Potentially, yes. An eligible off-the-plan concession can first reduce the dutiable value. If that reduced value falls within the first home buyer thresholds and the purchaser meets the other requirements, the first home buyer exemption or concession may also apply.

Does the saving become smaller as construction progresses?

It often can. Only eligible construction costs incurred after the contract date are deducted. As more construction is completed before you sign, less future construction generally remains available for the off-the-plan deduction.

Does the concession reduce foreign purchaser additional duty?

No. The SRO states that the temporary off-the-plan concession does not reduce foreign purchaser additional duty. That additional duty is calculated using the dutiable value before the off-the-plan concession is applied.

Explore your off-the-plan options with Norus Projects

If you are considering an apartment at Riverbend Ivanhoe or Parkview Burwood, understanding the potential stamp duty outcome is an important part of comparing your options.

With construction progressing, the amount of eligible construction remaining will continue to change over time. Speak with the Norus Projects team about currently available residences, then have your conveyancer confirm how Victoria's off-the-plan concession may apply to your individual purchase.

See what you could potentially save on a Riverbend Ivanhoe or Parkview Burwood apartment and explore your options before 21 April 2027.

This article provides general information only and does not constitute financial, taxation or legal advice. Stamp duty outcomes depend on individual circumstances, contract timing, the vendor's calculation and applicable legislation. Buyers should obtain advice from their solicitor, conveyancer, accountant or other suitably qualified adviser before making a property decision.

 *Terms and Conditions apply to any promotions and information that may be contained within this communication. Promotions may end at any time without notice and at a maximum will not be available for more than 14 days from the date of commencement. Only one promotion can be used per purchase and can not be used in conjunction with any other promotions. Prices and other values and information may change at any time without notice. For any government grants, concessions, programs, taxes, levies or duties, please refer to the relevant government websites for further information. The information contained herein is given for general information purposes only and it is subject to change. Readers, viewers and consumers are advised to perform their own research and investigations and obtain their own financial, legal and other advice. The information and materials do not form any representation by any vendors or agents of any vendors and may include third-party opinions that do not represent the opinion of any vendor or agent. They do not form part of any contract of sale and they do not constitute legal, financial, real estate or other advice and must not be regarded or relied upon as such. No warranty is given either expressly or implied and the vendors or agents do not assume liability for negligence or otherwise with respect to the contents herein. All images are artist impressions only. Any plans are yet to have had their structural and services review so are subject to change prior to completion of construction. All plans, dimensions, areas and particulars herein whether by measurements or visual representation are approximate only, for general information only, and do not constitute any representation by the vendor or its agents or representatives. They do not form part of any contract of sale. Changes will undoubtedly be made during development and dimensions, fittings, finishes and specifications are therefore subject to change. Any furniture, goods and chattels depicted in this document are not included with any sale. Prospective purchasers or lessees are advised to not to rely on the information contained herein and to satisfy themselves as to the accuracy of all information given by making their own inspections, searches, inquiries and advises or as is otherwise necessary. The vendor or its agents or representatives will not be responsible for any error or misdescription which may appear. Further, the vendor or the developer or their agents or representatives do not represent, warrant and/or guarantee that the integrity of this communication has been maintained or that the communication is free of errors, virus, interception or interference. Usage of this or any other websites and materials and any associated website or material is subject to further terms and conditions. Further terms and conditions apply. Please enquire with the vendor and agent for further terms and conditions.