Stamp duty on off-the-plan apartments
Legislation: Stamp Duties Act 1923
Date Issued: 28 June 2012
Information Circulars do not have the force of law.
As part of the 2012-13 Budget, the Government announced a stamp duty concession for purchases of off-the-plan apartments located within the area of The Corporation of the City of Adelaide.
The new concession will replace the Inner City Rebate.
The concession will provide a full stamp duty concession from 31 May 2012 to 30 June 2014 (capped at stamp duty payable on a $500,000 apartment) and a partial concession from 1 July 2014 to 30 June 2016.
The legislative amendments to implement this measure are contained in the Statutes Amendment and Repeal (Budget 2012) Bill 2012 (the “Bill”) which was introduced into Parliament on 31 May 2012. On 27 June 2012, the Bill was amended to additionally include the following areas within the scope of the concession:
- any land within the area where the Bowden Redevelopment project (Bowden Village) is being undertaken; or
- any land located within the area known as 45 Park, Gilberton.
The operation of this legislation measure is subject to the Bill coming into force as an Act.
Purchasers who wish to take advantage of this concession prior to the legislation being passed by Parliament should contact RevenueSA in the first instance.
After the legislation is passed, functionality will be available to process the concession by registered RevNet users. Alternatively, for non RevNet users, the transfer and relevant application must be submitted to RevenueSA for assessment.
The parties will need to complete an Application for a Concession on the Purchase of an Off-the-Plan Apartment which will be available from www.revenuesa.sa.gov.au.
Contracts entered into between 31 May 2012 and 30 June 2014
No stamp duty will be payable on the purchase of apartments bought through a qualifying off-the-plan contract entered into between 31 May 2012 to 30 June 2014 (both dates inclusive) where the apartment has a market value of $500,000 or less.
Where an apartment purchased via a qualifying off-the-plan contract has a market value greater than $500,000, the purchaser will be entitled to a stamp duty concession of $21,330.
Contracts entered into between 1 July 2014 and 30 June 2016
A partial stamp duty concession will be available for off-the-plan apartments purchased pursuant to qualifying off-the-plan contracts entered into between 1 July 2014 to 30 June 2016 (both dates inclusive).
Market value $500,000 or less
For qualifying off-the-plan contracts with a market value of $500,000 or less, stamp duty will be payable on the dutiable value as defined. The dutiable value will vary depending on the stage of completion of the residential development.
The deemed unimproved land value of an apartment will be set by the legislation at 35% of the market value of the apartment, with the value of construction to reflect the nature of works already performed.
In these cases the duty will be calculated under the following formula:
DV = (MV x 0.35) + (MV x 0.65 x C)
Market value over $500,000
Where the market value of the apartment exceeds $500,000, the duty chargeable will be the duty payable under Schedule 2 at the date of sale, reduced by an amount determined according to the stage at which the construction or refurbishment of the multi-storey residential development in which the relevant apartment is (or is to be) situated has reached at the relevant contract date.
The amounts by which duty will be reduced at each stage are as follows:
|Stage 1||Stage 2||Stage 3||Stage 4||Stage 5||Stage 6|
Date of Sale
For the purposes of the concession, the legislation deems the date of sale of the property that will apply under Section 60A to be the date on which the relevant qualifying off-the-plan contract was entered into.
The market value of an apartment for the purposes of this concession is therefore the consideration set out in the relevant contract, unless the Commissioner is of the view that the consideration is less than the market value of the apartment.
In these cases the Commissioner may seek an independent valuation to determine the market value of the apartment as of the date of the contract.
2 or more purchasers
Only one application may be made in relation to a qualifying apartment and therefore, in relation to an apartment being purchased by 2 or more purchasers, any benefit arising under the concession should be shared jointly.
Inner city rebate
The Inner City Rebate ceases on 31 May 2012. Contracts entered into on or after 31 May 2012 may be eligible for the new stamp duty concession.
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