The Victorian Government has recently announced its plans to introduce a number of amendments to the Duties Act 2000. The amendments being proposed are intended to be effective from 1 July 2017.
Key proposed changes which are likely to impact you
1. Spousal Transfers
Currently, transfers between married spouses (whether for consideration or for “natural love and affection”) are exempt from stamp duty in Victoria.
However, the proposed changes would mean that a spousal transfer will only be exempt from duty if:
- It is between domestic partners or spouses
- No other person takes an interest in the property under the transfer
- There is no consideration for the transfer
- The property is a residential property
The Government is also seeking to introduce a requirement that:
- The property be the principal place of residence of at least one of the persons in the marriage or domestic relationship
- That the relevant person must occupy the property for a continuous period of at least 12 months commencing within 12 months of the transfer.
It is also proposed that if the residence requirement is not satisfied, the parties in breach are prevented from obtaining the benefit of any future exemption until duty has been paid on the earlier transfer.
2. Off the plan purchases
For some time now, investors and owner-occupiers have been the beneficiaries of concessional treatment for stamp duty in relation to the purchase of property “off the plan”.
That is, stamp duty is calculated based on the “dutiable value of the lot”, which is typically calculated as being the purchase price for the property less the value of construction and development works which are undertaken after the date of the contract. In many cases, this resulted in significant stamp duty savings for purchasers.
The proposed amendments will restrict the concessional treatment of duty for an off the plan purchase to first home buyers (i.e. excluding investors etc.)
Think you may be impacted?
The proposed changes are significant and likely to impact people who are either planning to invest in property or implementing asset protection strategies.
Talk to your DPM Consultant for further details or information, who can put you in touch with a lawyer or conveyancer if you will be impacted by any of the changes above.
* DPM communications are intended to provide commentary and general information. They should not be relied on as legal or financial advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication.