What is the Victorian Off-the-Plan Duty Concession?
The Victorian Off-the-Plan Duty Concession reduces stamp duty payable by eligible buyers of residential properties purchased off the plan, easing upfront purchasing costs. It applies to properties such as apartments and townhouses within strata schemes and has been extended to 21 April 2027 to support homebuyers and stimulate development1.2
The concession allows buyers to pay a reduced duty amount at settlement compared to the full market value rate, based on the contracted purchase price rather than the completed property’s value. This can significantly lower the stamp duty bill when buying off the plan. For example, a purchaser entering an off-the-plan contract benefits up to a calculated concession before the plan of subdivision registration for that property. Under Sale of Land Act 1962 (Vic) s 9AE, a purchaser may rescind the contract if the plan is not registered within 18 months (or a specified period) of the contract date. This interacts with timing and eligibility considerations for the concession34[Sale of Land Act 1962 (Vic) s 9AE]. The legislative framework encourages buyers to proceed with confidence, knowing the concession makes off-the-plan purchases more affordable and that statutory protections exist if registration does not occur within the allowed timeframe.
Which Properties are Eligible for the Concession?
The Victorian off-the-plan duty concession applies principally to residential properties bought off the plan within strata subdivisions that include common property. This means purchasers of apartments and townhouses built as part of a shared development can qualify if their contract meets certain statutory conditions. Not all off-the-plan contracts fall within this concession.
Specifically, the concession covers dwellings in strata schemes where common property exists, such as shared gardens, driveways, or facilities managed jointly by the owners corporation. For example, a townhouse within a multi-lot strata plan with a communal driveway can be eligible. This eligibility excludes free-standing homes on separate title lots without common property.
The concession does not extend to commercial properties or to off-the-plan contracts that include a sunset clause allowing the vendor to rescind the contract without complying with Division 2A of the Sale of Land Act 1962 (Vic). Section 10A of this Act clarifies that any such sunset clause must permit rescission only in accordance with Division 2A, ensuring protections for purchasers remain intact in off-the-plan sales involving residential lots.5
This distinction is crucial because it maintains purchaser safeguards against premature contract termination, which can affect eligibility for the concession. Prospective buyers should verify that the property forms part of a strata subdivision with defined common property and that the contract’s sunset clause complies with the statutory requirements to qualify for the Victorian off-the-plan duty concession.
What are the Requirements for Claiming the Concession?
Claiming the Victorian off-the-plan duty concession requires submitting a formal application to the State Revenue Office as part of the duty payment process, accompanied by specific vendor and purchaser documentation proving eligibility. The vendor must provide detailed property and contract information, while purchasers must ensure contractual compliance, including awareness of sunset clause requirements under Sale of Land Act 1962 (Vic) s 10B.
The application for the concession typically forms part of the land transfer duty transaction. Vendors must supply evidence such as the contract of sale and subdivision plan details. Purchasers should verify eligibility by confirming the property qualifies as an off-the-plan residential dwelling in a strata subdivision.
A key procedural step involves complying with the vendor’s obligations under Sale of Land Act 1962 (Vic) s 10B. This section requires the vendor to give purchasers at least 28 days’ written notice and obtain written consent before rescinding the contract under a sunset clause. Without this written consent or a Supreme Court order, the contract cannot be rescinded. This requirement may affect eligibility for the concession.
Review checklist:
- Ensure the contract documentation classifies the property as an off-the-plan residential dwelling in a strata scheme eligible for the concession;
- Confirm the vendor has complied with the 28-day written notice and consent requirements under Sale of Land Act 1962 (Vic) s 10B before any sunset clause rescission;
- Submit the application for the concession with all required vendor and purchaser information as part of the stamp duty transaction to the State Revenue Office6.7
Failure to meet these procedural and documentary requirements can lead to the loss of the concession, increasing duty obligations for purchasers.
What Happens if Requirements are Not Met?
If the requirements for the Victorian Off-the-Plan Duty Concession are not met, a buyer risks penalties including having to pay the full duty plus interest and fines. Errors in documentation or intentional disregard of rules can lead to significant legal consequences and possible concession disqualification.
For example, in the disputed case Karci v CSR [2012] VCAT 790, purchasers failed to properly document construction costs deducted under the concession and faced penalties due to that non-compliance.8 This demonstrates the importance of accurate cost documentation when claiming the concession.
Also, the Sale of Land Amendment Act 2019 (Vic) introduced a sunset-clause regime protecting purchasers by restricting vendors’ ability to rescind contracts without proper notice or court approval. It enforces a 28-day written notice and purchaser consent requirement under new sections 10A to 10E of the Sale of Land Act 1962 (Vic). If vendors attempt rescission without fulfilling these procedural requirements, the transaction risks legal challenges and delays.
Buyers should be aware that missed deadlines, incomplete paperwork, or misrepresentations related to an off-the-plan property purchase not only jeopardise the entitlement to the Victorian off-the-plan duty concession but also expose them to legal action and financial penalties.9 This reinforces the necessity for careful compliance and professional legal advice throughout the process.