New duty exemptions for house and land packages and off-the-plan contracts

Prior to 1 July 2017, duty was payable on a house and land package or for an off-the-plan house based on the full amount paid for the land and the house to be built.

From 1 July 2017, this is no longer the case for most house and land packages and off-the-plan contracts involving new single-dwelling homes (other than a flat, home unit or other similar building). Instead, duty will only be charged on the value of the land, excluding the value of the improvements (i.e. the dwelling to be built) that form part of the contract.

Key information

  • No duty is payable on the build costs for houses under off-the-plan sale contracts entered into after 1 July 2017.
  • No duty is payable on the build costs for houses included in house and land packages entered into after 1 July 2017.
  • Full duty will continue to apply to the purchase of existing homes that may be lawfully occupied (e.g. spec homes) where the improvements have already been completed at the time of signing the sale contract.
  • The exemption does not extend to flats, home units or other such buildings.
  • The exemption will apply to strata developments where there is a stand-alone single dwelling.
  • The exemption applies to all purchases of qualifying residential premises (including investments) and is not restricted to recipients of the First Home Owner Grant.

If you have any questions about how these amendments could affect a property development that you are involved in, please contact either:

David Shelley
Partner
M: 0427 183 217
E: dshelley@pageseager.com.au

Simon Rimmelzwaan
Lawyer
T: (03) 6235 5114
E: srimmelzwaan@pageseager.com.au

Published: 13 September 2017

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