From 1 July 2023, the Government made changes to the eligibility criteria for pensioners wishing to apply for the stamp duty concession, bringing it in line with the First Home Owners Grant and other concessions.
The new threshold for purchase prices in contracts signed on or after 1 July 2023 means that:
- A full exemption on Purchase Prices when buying a home valued at $600,000 or less
- A concession (on a sliding scale) on Purchase Prices when buying a home valued between $601,000 and $750,000
Previously the threshold was only $350,000 for a full exemption, and up to $500,000 for a partial concession.
On the face of it, this looks like a win for pensioners, but the reality may be very different, depending on the circumstances.
The new criteria is now a one-time benefit for ALL parties involved in the transaction, whereas before, the eligibility was individually based.
For example, prior to 1 July, an eligible pensioner couple buying a property for $650,000 would pay no stamp duty. This is calculated on the basis that their 50% share of the property was less than $350,000.
With the new changes however, if the same couple buys a $650,000 property and the contract is signed after 1 July 2023, they will now have to pay $11,356.67 in stamp duty as the full price exceeds the new threshold. They would only receive a concession.
Likewise, before 1 July 2023, if a couple purchased a property for $450,000 and only one party was an eligible pensioner, they would receive a concession based on the eligible pensioner’s share. The eligible pensioner’s share of the stamp duty would be $0, and the other purchasers’ share would be $9,485 (based on their half of the purchase price). The other purchaser would also still have the option to apply the Pensioner Concession to another future purchase once they became an eligible pensioner.
Under the new criteria, the same couple would pay no stamp duty due to the total purchase price being lower than the new threshold. However, the other purchaser will not be able to apply for the concession in the future as they have already received the benefit from it.
It is important to keep up to date with the evolving landscape of property buying to ensure you are making informed decisions regarding your real estate transactions. Speak to our property team today, call us on 03 5560 2000 or use our free conveyancing calculator.