With home prices soaring, stamp duty can become a barrier to downsizing to an apartment or townhouse. Some State and Territory governments recognise this and respond by offering schemes to lower stamp duty for downsizers.

This article offers an area-by-area overview of stamp duty savings schemes relevant to buying an apartment or townhouse.

The information is only relevant to properties purchased on the open, general real-estate market. So, it’s not relevant for those looking to move to a retirement village or land lease community (where in most instances you won’t need to pay stamp duty at all).

Most schemes are specific to a property type or a person’s situation. For example, some apply to newly constructed apartments bought off-the-plan, others to already constructed homes. Some are specific to pensioners and others only apply up to certain purchase prices.

We’ll list states in alphabetical order. And - spoiler alert for those about to start scrolling - South Australia and Northern Territory are not included as, at the date of this article, they do not offer any relevant schemes.

Australian Capital Territory: Schemes for off-the-plan and pensioners

1. No stamp duty for off-the-plan

If you’re keen on an off-the-plan apartment or townhouse in the ACT valued at $500,000 or less, you will not pay any stamp duty. You must live in the home for at least 12 months from the settlement date.

2. Pensioner scheme

ACT pensioners can also benefit from the ‘pensioner duty concession scheme’ to buy a home worth up to $490,000 without incurring stamp duty.

For homes worth up to $642,000, you pay no duty on the first $490,000 value, then just over ten percent ($10.85 for every $100) of stamp duty payable on the rest of the property’s purchase price. The scheme applies to newly-constructed and established homes of any type.

NSW: Deferment option only

Stamp duty on off-the-plan homes can be deferred for up to 12 months or until the property is handed over (whichever comes first).

While deferment does not result in any decrease in the amount payable, this scheme could be helpful during the transition from one home to the downsized home, a time when cash flow can be challenging.

Queensland: Concession on the first $350,000 of a home

Queensland’s government offers a ‘Home concession’ scheme to reduce the amount of transfer duty (the Queensland term for stamp duty).

The maximum saving, achievable for any home purchased for over $350,000 is $7,175.

To claim a home concession when you buy or acquire a home, you must:

  • move into it with your personal belongings and live there on a daily basis within 1 year of settlement (this time cannot be extended)
  • not dispose (sell, transfer, lease or otherwise grant exclusive possession) of all or part of the property before you move in.

Tasmania: A scheme for pensioners who downsize

Tassie pensioners who downsize after selling their home are eligible to a 50 percent discount on property transfer duty (the Tasmania term for stamp duty). It’s specific to  downsizing in that the value of your new home needs to be less than your former home.

And, the scheme is only available for homes purchased for $500,000 or less. At this stage, the scheme applies up until 30 June 2022 and your new home needs to be transferred within six months (in either direction) of selling your former home.

Victoria: Central and off-the-plan apartment and lower-cost home options

1. City centre new but unsold apartments

Stamp duty has been abolished for apartments within the Melbourne City Council area that are already built but have been unsold for over 12 months. For apartments that are already built but have not sold for less than 12 months, you’ll pay only 50 percent of the full stamp duty amount.

This scheme aims to reinvigorate Melbourne’s centre, which has been badly affected by COVID lockdowns. The savings will be up to $55,000, an ideal incentive for anyone who has been eyeing off city life with the convenience of apartment living.

The concession scheme expires on 30 June 2022.

2. Off-the-plan purchases outside of the Melbourne City Council

Outside of the Melbourne City Council area, off-the-plan apartment buyers - who are going to use their apartment as their home - do have the potential to claim a small discount on their stamp duty. 

The government has increased the threshold to access this discount to $1 million from 1 July 2021.

3. Affordable, likely regional, homes

For Victorian pensioners looking to buy a home valued up to $330,000, a full exemption from stamp duty is available. Partial concessions apply under the same scheme for properties worth up to $750,000.

This full-exemption price limit may not give much scope in Melbourne but, with many unit prices in regional Victoria still in the $300,000 range, this is of interest for regional residents or those wanting to make a treechange or seachange at the same time as downsizing.

Western Australia: Off-the-plan savings until late 2023

WA downsizers who sign a pre-construction contract for a new residential unit will reduce their stamp duty by 50 percent. The scheme is capped to a discount of $50,000 and applies to contracts signed between 24 October 2021 and 24 October 2023.

If you’re reading this before 23 October 2021 and are ready to sign, this offer is at the even higher rate of 75 percent (also capped at $50,000).

The offer applies to apartments in multi-tiered strata developments. The scheme is not exclusive to downsizers but would suit people wanting to downsize to fully independent living without the upkeep burden of a larger home and garden.

Keen to take advantage of these stamp duty schemes? Find your ideal downsizer property today.

Disclaimer

Please note this story has been prepared as a general guide only, and should not be relied upon as a substitute for seeking your own independent legal and financial advice. 

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