June 7, 2024

Pensioner Duty Exemptions: What You Need to Know

As of July 1, 2023, the State Revenue Office updated the eligibility criteria for pensioners applying for stamp duty concessions, aligning the purchase price thresholds with that of the First Home Buyer exemption or concession.

These changes have had a drastic impact on what transactions pensioners will be eligible to claim a stamp duty exemption, or concession on, due to the change in thresholds, for obtaining either a full or partial concession for payment of stamp duty.  

Previously, a full exemption was available for purchases of less than $330,000 with a partial concession available to homes valued up to $750,000.

Eligibility was previously determined individually, meaning that if you were to buy a share in a property the thresholds of the exemption or concession would be assessed against the value of the share acquired. This means that for contracts signed prior to 1 July 2023 when two eligible pensioners purchased a home together valued $600,000 or less, they would be eligible for an exemption and if purchasing a property between the value of $600,001 to $1,500,000 they were eligible for a concession.

Key Updates to Pensioner Duty Exemptions for contracts signed after 1 July 2023:

1. New Purchase Price Thresholds:

Full Exemption: Homes valued at $600,000 or less.

Partial Concession on a sliding scale: Homes valued between $601,000 and $750,000

No exemption available for Homes more than $750,000.

2. One-Time Benefit Per Transaction:

The new rules apply the benefit to all parties involved in a transaction as a one-time use with the thresholds of the exemption or concession being applied against the total value of the home, not the value of any share.

Practical Examples of the Changes

Example 1:

A pensioner couple purchasing a home valued at $650,000 under the new rules will only receive a partial concession. They would be required to pay approximately $11,356.67 in stamp duty since the purchase price exceeds the new full exemption threshold. Under the old rules, they would have paid no stamp duty because each party’s share of the property (50%) was less than $330,000.

Example 2:

For a couple, buying in equal shares (50/50), where only one party is an eligible pensioner buying a $450,000 property:

Before July 1, 2023: The eligible pensioner paid no stamp duty on their share, while the other party paid $9,485. The non-pensioner could still apply for the concession in the future upon becoming eligible.

After July 1, 2023: The entire purchase would incur no stamp duty, as the total price is below the $600,000 threshold. However, the non-pensioner cannot apply for the concession again in the future.

Hill Legal’s Hot Take

The updated pensioner duty exemptions are designed to offer substantial financial relief, but they come with nuanced implications. Pensioners can benefit significantly from the higher thresholds, yet the one-time benefit rule could limit future advantages. It’s crucial for pensioners to understand these changes and how they affect their specific circumstances.

At Hill Legal, we specialise in navigating these complex legal landscapes. If you’re considering a property purchase or need advice on how these changes impact you, contact Hill Legal today.

Our expert team is here to help you maximise your benefits and ensure you make informed decisions. Don’t let the fine print catch you off guard—reach out to Hill Legal now.

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2 Responses

  1. We are buying a home which you have with your office. Graeme and Kerryl Roberts which Shelley is handling will you be able to look into this with the stamp duty concessions please

    1. Hi Kerryl, Thanks for reaching out. Please email or call Shelley directly so we can assist with your enquiry. Our office number is 03 5976 6500.
      Many thanks,
      Hill Legal

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