In 1989, former Prime Minister Paul Keating boasted for being able to garner public support for difficult reforms when he pronounced:

“I’ll guarantee if you walk into any pet shop in Australia, the resident galah will be talking about micro-economic policy.”

Thirty years on, with the initial headwinds of the COVID-19 pandemic momentarily passing, stamp duty appears to be the talk of the town for the resident galah and various state revenue offices in Australia.

The recent push by several states to replace stamp duty with some sort of a land tax for all residential properties appears to be driven by micro-economic reform to get rid of an anachronistic tax that unfairly restricts mobility in the housing market, particularly when contextualised in the current COVID-19 economy.

The enactment of stamp duty legislation can be traced back to the Stamp Duties Act 1879 (Vic).

If the age of stamp duty legislation in Victoria is any indicator, it becomes evident that there may be some truth when stamp duty is characterised as an anachronistic impost or an inefficient method of taxation.

However, for those who intend to purchase property and are hoping for the removal of stamp duty in the near future, it may be worth holding your breath. There are many unavoidable factors, ranging from the magnitude of the reform required, unpopularity of the implementation of a broader land tax and the significant trauma that would result in the state taxation revenue base.

Seemingly, the discussed upheaval of state taxation laws and stamp duty is unlikely to be implemented with any immediacy.

In the meantime, it is imperative to be aware of the various stamp duty exemptions and concessions that are available in Victoria, with the most common listed below:

  • First Home Buyer Exemption or Concession:
    • First home buyer
    • Exemption: $600,000 or less
    • Concession: $600,000 – $750,000
  • Commercial and Industrial Land in Regional Victoria:
    • 10% – 50% concession of stamp duty if property is wholly in regional Victoria and used solely or primarily for commercial or industrial uses.
  • Young farmers:
    • Young farmers below the age of 35 purchasing farmland for primary production
    • Exemption: $600,000 or less
    • Concession: $600,000 – $750,000
  • Exemption from Foreign Purchaser Additional Duty:
    • Foreign purchaser who has a spouse or domestic partner who is not a foreign natural person, the land purchased is held jointly and the property is occupied as a principal place of residence for 12 months.
  • Change in Trustees:
    • Retirement or appointment of a new trustee
  • Property vested in an apparent purchaser:
    • Property held by an apparent purchaser is transferred to the real purchaser who provided all the purchase monies
  • Transfers to and from a trustee or nominee:
    • Transfer of property held by a trustee or nominee without any change in beneficial ownership
  • Property passing to beneficiaries of trusts:
    • Property is transferred to a beneficiary of a trust where among other criteria, there is no consideration provided for the transfer.
  • Landholder exemptions or concessions:
    • An exemption or concession is applicable if no duty would be applicable had the transfer of the interest in land been a transfer of land. OR
    • If the imposition of duty would result in an anomalous duty outcome, such that a higher duty is payable, the higher amount of duty payable may be reduced by the Commissioner when regard is made to Chapter 2 of the Duties Act 2000 (Vic).

Should you be eligible for a stamp duty exemption or concession above and would like to enquire, or have been charged duty for a transaction that you believe should not be liable to stamp duty, please contact Tony Pointon, Amelita Hensman, Andrew Pointon or Thomas Abraham on (03) 9614 7707 if you wish to discuss further.

Authors