On 18 June 2019, the State Taxation Acts Amendment Bill 2019 (Vic) (“Amendment Bill”) was given Royal Assent. The Amendment Bill made a number of significant changes to Victoria’s state taxes, including new stamp duty concessions.
The Amendment Bill amends the Duties Act 2000 (Vic) (“Duties Act”) to include Division 5A which, from 1 July 2019, provides for duty concessions for regional properties which are used or intended to be used for commercial, industrial or extractive industry purposes. The duty concession is available to all purchasers or transferees of land, including individuals, corporations or trusts.
The duty concession for eligible transfers for the 2019-20 financial year is ten percent (10%). The concession will increase by ten percent (10%) each subsequent financial year, until 1 July 2023, when it will be capped at fifty percent (50%).
Contract entered into | Duty concession amount |
1 July 2019 to 30 June 2020 | 10% |
1 July 2020 to 30 June 2021 | 20% |
1 July 2021 to 30 June 2022 | 30% |
1 July 2022 to 30 June 2023 | 40% |
After 1 July 2023 | 50% |
If the transferee is entitled to receive another duty exemption or concession under the Duties Act, they must elect which of the exemption or concession they intend to claim.
To take advantage of the new duty concessions, the following requirements must be met:
The property does not have to be used for the qualifying use at the time of the transfer. Div 5A requires only that the transferee must intend to use the property for the qualifying purposes for a continuous period of at least twelve months within two (2) years of becoming entitled to possession of the property.
This means that the concession may be available, for example, for the purchase of vacant commercial or industrial land on which the transferee intends to build and operate a business which will meet the qualifying use requirement within the relevant time period.