Concessions - Liviti Property

Buying Off the Plan Properties: 7 Powerful Concessions to Save Big on Stamp Duty

Daniel Chadrawy on May 6, 2022

When it comes to off the plan concession offerings, quite a few benefits are available to purchasers who qualify for them, making them an attractive opportunity for all kinds of buyers.

One of the most popular off the plan concession opportunities involves acquiring a stamp duty concession. Generally, these concessions will benefit first homeowners and purchasers who intend on living in the home.

What Is An Off The Plan Transaction?

Buying a property off the plan means you are entering into a contract for property purchase before the construction of the property has commenced or while construction is in progress.

An off the plan transaction could refer to land that is going to be subdivided, an apartment, a townhouse, or a range of other dwelling types. Land, in itself, does not qualify.

Off The Plan Stamp Duty Concessions

Taking advantage of available benefits is a huge incentive for home buyers, especially ones that allow a reduction to the upfront fees required to secure a home.

What Is Stamp Duty?

Also known as transfer duty, this is one of the bigger costs to be accounted for. It is the tax that the Government imposes when you purchase a property at a particular value, or when the ownership is transferred. Unlike land tax, you only pay duty once.

It is calculated according to the total dutiable value of the property.

Simply match up the purchase price of the property you’re considering with the dutiable value information in the table below for NSW rates on owner-occupied or investment purchases. It’s easy enough to find information for other states via Google.

What Off The Plan Concession Is Available With Stamp Duty?

It’s no surprise that Australian stamp duty concession availability and eligibility vary between states.

In NSW, this concession works by pushing the duty payment due date 12 months into the future (ahead of the standard 3-month timeframe), or until the property has been officially handed over, whichever comes first.

In the ACT, if your contract was exchanged between 1 July 2021 and 31 March 2022, no duty applies to off the-plan unit owner-occupier purchases up to $500,000. This was then increased to purchases up to $600,000 as of April 2022.

There are quite a few first home owner concession opportunities including the First Home Buyer Assistance Scheme in NSW which may apply according to the dutiable value of off-the-plan properties.

Honestly, we’re chuffed just thinking of all the smashed Avo on toast those savings could buy!

Who Is Eligible For Off-The-Plan Concessions?

In NSW, in order to be eligible for stamp duty concession, the off-the-plan property you intend to purchase must be a residential property that at least one purchaser intends to live in as a principal place of residence for 6 months continuously, within 12 months of purchasing the home.

You must also be an Australian citizen OR a New Zealand citizen with a subclass 444 visa having lived in Australia for over 200 days in the last 12 months OR a permanent resident who has lived in Australia for just as long to be eligible.

If any residence requirement is not met, purchasers may need to pay a penalty tax.

How to Apply for Off-The-Plan Stamp Duty Concession

Currently, the State Revenue Office manages concession applications relating to first home buyer off-the-plan purchases in NSW.

Here’s your step-by-step action plan for applying…

Do your own thorough research before applying
Confirm your Australian citizenship status and other personal conditions meet the application requirements
Complete and lodge your application accurately and with supporting evidence

You can find further information and access the application form here.

New Requirements For Off-The-Plan Contracts To Know Before Your Contract Date

Prior to the date of the contract, check out the new requirements put into place in NSW from December 2019.

These new laws were added to create more disclosure obligations on vendors so that purchasers have more transparency throughout the buying process.

As a first home buyer, purchasing a residential property, like a new apartment, off-the-plan can offer some pretty sweet benefits, but please do keep in mind that suitability will always depend upon the individual circumstances of the purchaser.

Contact one of our expert property consultants at Liviti to help answer any of your questions or take a look at our latest off-the-plan properties available for purchase.

Happy house hunting!

Is stamp duty payable on off the plan purchases in NSW?

It certainly is! Unless you meet any of the concession options mentioned in this article, your stamp duty payment will be due within 3 months of the completion of the transaction.

Everything You Need To Know About First Home Owner Grant

Lara Osborn on February 8, 2022

Are you thinking of buying your first home? If so, how does getting extra government funding toward buying that home sound? It’s pretty exciting, isn’t it!

As a first home buyer, you may be eligible for The First Home Owner Grant (FHOG), which can help you get into your own place sooner, let alone at a much cheaper price.

Here is everything you should know about The First Home Owner Grant.

What is The First Home Owner Grant (FHOG)

The First Owner Buyer Grant is a one-off payment to help first homeowners to manage the costs of buying their first home.

Introduced on 1 July 2000, this grant is aimed to offset the effect of GST on homeownership. It is also a national scheme funded by states and territories, so each state will have their own eligibility criteria.

How does the First Home Owner Grant work?

New South Wales

Under the FHOG in NSW, you might be eligible to get $10,000 towards the purchase price of your first home. This home must have a total value below $600,000, and be either newly constructed or ‘substantially renovated’ and no one has lived in after the renovations were completed.

If you plan to build a new home, you can still be eligible for the FHOG in NSW as long as your land plus the home you build have a combined value of less than $750,000.

To be eligible for the NSW’s first homeowner grant, you must be:

At least 18 years old.
Must be a first home buyer as a person, not as a trust or company.
Must have Australian citizenship or permanent residency.
You or your spouse, partner or co-purchaser must not have previously owned a home.
You must occupy your first home as your principal place of residence within 12 months of the construction or purchase of your home

As a first-time buyer in NSW, you will also get benefits from the First Home Buyer Assistance Scheme (FHBAS), under which you can apply for a full or partial exemption on stamp duty (transfer duty) if your new home value is no more than $1,000,000.

For more information on FHOG and FHBAS click here.

Australian Capital Territory

Although the first homeowner grant is no longer available in ACT, it has been replaced with the new Home Buyer Concession Scheme from 1 July 2019. Under this new scheme, first home buyers can apply for exemption on stamp duty, which could add up to $35,910.

To be eligible for this scheme, you must be:

At least 18 years old.
The total gross income of all buyers must not be greater than the income threshold
You or your partner or co-purchaser must not have previously owned a home in the last 2 year
One buyer must live in the house for at least 1 year

For more information click here

Queensland

Under the First Home Owners’ Grant, first home buyers in Queensland can get $15,000 towards buying or building a new home valued at less than $750,000.

If your home costs less than $500,000 or vacant land less than $400,000 in Queensland, you will also be exempted from paying stamp duty.

To be eligible for the grant, Queenslanders will need to be at least 18 years old and must be Australian citizens or permanent residents. More info and conditions about Queensland’s Transfer Duty Concession here.

Victoria

Similar to NSW, Victorian first home buyers might receive a $10,000 grant when purchasing or building a new home valued at less than $750,000. However, further concessions will be applied if you are an off-the-plan buyer, pensioner or farmer.

Under duty concessions, Victorian first home buyers will also get:

Duty exemption if the home value up to $600,000
Duty concession if the home value from $600,001 to $750,000

Click here to check all eligibility requirements

South Australia

A grant of $15,000 is available for new properties valued at less than $575,000, and the buyer must live in the home for at least six months. Click here for detailed information.

Western Australia

Western Australian citizens might be eligible for a grant of $10,000 when buying or building their first home. However, the cap on total value depends on where the home is located:

South of the 26th parallel – the value of land and building is up to $750,000
North of the 26th parallel – the value of land and building is up to $1,000,000.

Stamp duty exemptions and concessions are also available in Western Australia if the new home is valued at less than $530,000 and vacant land is less than $400,000.

For more information click here.

Tasmania

First home buyers who are building a new residence or purchasing a newly built residence may be eligible for a grant of up to $30,000.

If your property’s value is $500,000 or less in Tasmania, you can also receive a 50 per cent discount on stamp duty.

More information can be found here.

Northern Territory

If you are buying or building a new home in Northern Territory, you can apply for a First Home Owner Grant of $10,000 cash payment. You might also get up to $2,000 under the Household goods grant scheme and up to $10,000 to renovate your home.

Same as other states, there might be a few conditions for you to be eligible for the home owners grant in NT, including being aged 18, must not previously owned property and must be applying for FHOG for the first time in Australia.

For more information click here

How to apply for the First Home Owner Grant (FHOG)?

There are 2 ways you can apply for FHOG, either with your bank or financial institution when you’re arranging finance to buy your home, or directly through the state revenue office if you’ve already completed the purchase process or construction has commenced.

You can download the first home owners grant application form here:

Frequently asked questions

You asked. We answered. Here is the list of answers to some of the more frequently asked questions!

Am I eligible for the grant if I’m a temporary resident?

Unfortunately, First Home Owner Grant is currently available only if you are a permanent resident and Australian citizen.

Am I eligible for the grant if I inherit the property?

No. You must be a first-time buyer or builder to be avail of the grant.

Am I still eligible for the grant if I have property outside of Australia?

Yes. If you have not owned property before in Australia, you might be approved for the grant.

Am I eligible for the grant if I’m buying an existing home?

This depends on the state or territory, so you might need to check with your local revenue office if your property meets their standards.

Does my income affect the grant?

In general, your income would not affect your application for the grant.

However, you might need to meet the income threshold to apply for the Home Buyer Concession Scheme if you’re buying your first home in ACT.

When should I expect the grant to be paid?

Typically, the grant will be given at settlement if you are purchasing a new home or at the completion date if you build your own home. This will also fall under the guidelines of each state.

Is the grant taxed?

No. You do not have to pay tax on the amount of grant you receive

Conclusion

Buying your first home is an exciting journey, and it can also be an expensive one. There are plenty of costs you might need to consider including stamp duty, inspections, and conveyancers.

But thankfully, with grants and reduction schemes from the government, you can get your foot into the property market much easier and quicker.

If you’re still unsure about your eligibility or you have questions about The First Home Owner Grant, talk to our friendly Liviti team at (02) 9056 4311 or get in touch with us here. We will give you a helping hand and guide you through every step of the way to securing your dream home.