Free Stamp Duty, Time is Running Out

Posted on October 20th, 2011

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By Robert Lindsay

Robert Lindsay is a Director at Mullane & Lindsay in Newcastle and leads our Commercial & Property Law team.

In the recent State Budget, the Treasurer announced that “First Home – New Home” will replace the First Home Plus scheme from 1 January 2012. As from that date, the existing scheme whereby all first home buyers purchasing for under $500,000.00 enjoy an exemption from stamp duty. After 1 January 2012, free Stamp Duty will be available to an eligible purchaser who is a natural person (ie not a company or trust) at least 18 years of age who has not and whose spouse / de facto spouse has not:

  • At any time owned (either solely or with someone else) residential property inAustraliaother than property owned solely as a trustee or executor; or
  • At any time been the holder (either solely or with someone else) of a leasehold interest granted by the Commonwealth in residential property in theAustraliaCapitalTerritory; or
  • Previously received an exemption or concession under First Home Plus.

To be eligible for free Stamp Duty after 1 January 2012, the property must be:

  • A new home (that is a home that has not been previously occupied or sold as a place of residence); or
  • A substantially renovated home; or
  • A vacant block of residential land.

If the purchase price for the new home is less than $500,000.00 then no Stamp Duty will be payable. If the purchase price for the vacant block of land is less than $300,000.00 then no Stamp Duty will be payable.

The purchaser must reside at the property as their principal place of residence for a continuous period of 6 months commencing within 12 months from the completion of the agreement to purchase the property.

The effect of these changes is that after 1 January 2012 there will be no Stamp Duty exemptions in respect of existing dwellings unless they are new or substantially renovated. First home purchasers have less than 3 months to take advantage of the exiting First Home Plus scheme. After 31 December 2011 if a first home buyer purchases an existing property for say $490,000.00 then the Stamp Duty payable will be $17,540.00.

Robert Lindsay is a Director at Mullane & Lindsay, and practises extensively in Commercial Law, Property Law and Wills & Estate Planning. If you require any assistance in this area please contact Robert Lindsay to arrange a consultation or contact our Newcastle office.

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