How to Calculate Stamp Duty Savings with Off-the-Plan Concessions

Stamp duty—also known in some states as transfer duty—is often one of the most significant upfront costs when purchasing property in Australia. However, buyers of off-the-plan properties may qualify for certain concessions or exemptions that can lead to substantial savings. In this blog post, we’ll walk you through the key steps to calculate potential stamp duty savings, outline the factors that influence these discounts, and introduce Coposit—a platform that makes purchasing off the plan less financially daunting.

1. Understand the Basics of Stamp Duty

Stamp duty is a state-based tax that typically applies whenever real estate is transferred from one party to another. The exact calculation methods vary from state to state, but most use a tiered or progressive system based on the purchase price of the property.

Key Points

• Different Thresholds: Each state has its own brackets for stamp duty rates, which can change over time.
• Special Concessions: First-home buyers, pensioners, and off-the-plan buyers may receive partial or complete exemptions.
• Tip: Always check your state’s current rules or consult a conveyancer for the most accurate information.

2. Off-the-Plan Concessions Explained

When you buy an off-the-plan property, you’re essentially purchasing a yet-to-be-built or under-construction dwelling. In some states, stamp duty concessions allow you to pay duty only on the land component, or on a lower contract price reflecting the property’s value at various stages of construction. This means you might only pay duty on the value of the land plus any construction work completed by the date of purchase—not the final, finished value.

Example:

If you sign the contract when construction has barely started, the property’s “dutiable” value may be significantly lower than the eventual completion price, leading to big savings.

3. Step-by-Step Guide to Calculating Savings

Here’s a simplified example for illustrative purposes. Note: Exact figures and methods differ by state, so use this only as a guideline.

• Step 1: Identify the Full Contract Price

Let’s say you’re purchasing an off-the-plan apartment with a final contract price of $600,000.

• Step 2: Determine the Construction Cost to Date

At the time you sign the contract, the developer may provide a “construction cost to date” value. Suppose construction is only 20% complete, and the cost breakdown suggests:

• Land component: $200,000
• Completed construction: $80,000 (out of a total $400,000 planned)
• Total property value at the time of contract: $280,000
• Step 3: Find the Dutiable Amount

In some states, you might pay stamp duty on $280,000 instead of the full $600,000. This difference—$320,000—represents the remaining construction cost that isn’t yet completed at the time of purchase.

• Step 4: Apply the State’s Stamp Duty Rates

Each state has its own rate thresholds. For simplicity, let’s hypothetically say that on $280,000, the stamp duty comes to $8,000. If you had to pay stamp duty on $600,000, it might be closer to $22,000 (these are not real figures—just an example).

• Step 5: Calculate Your Savings

The difference between what you’d pay without the concession ($22,000) and what you pay with it ($8,000) is $14,000 in potential stamp duty savings.

Important: Always verify your state’s regulations and consider any additional concessions (e.g. first-home buyer benefits) that might further reduce your stamp duty.

4. Factors Affecting Your Stamp Duty Concession

Stage of Construction The earlier you buy in the construction phase, the higher the proportion of the project still to be built—thus lowering the dutiable amount.

• Location and State Regulations

Each Australian state and territory sets its own rules for off-the-plan concessions. Some might limit the concession to first-home buyers, while others allow it for any eligible purchaser.

• Type of Property

Land and house-and-land packages sometimes have different concession structures compared to apartments or townhouses.

Contract Dates The date you sign your contract and lodge it with relevant authorities can affect the dutiable value and any possible exemptions.

5. How Coposit Helps You Secure an Off-the-Plan Property

Even if you stand to save on stamp duty, the upfront deposit can be a major hurdle—especially if the market is moving quickly. Coposit addresses this challenge by allowing buyers to split their deposit into manageable weekly instalments, interest-free and fee-free.

Coposit’s Key Advantages Search & Connect Browse off-the-plan apartments, house-and-land packages, or new developments nationwide in Coposit’s online marketplace.

Get Coposit Qualified Determine your weekly payment capability and future mortgage capacity—ensuring you commit to a property within your financial comfort zone.

Own While You Save Secure your property with a minimum $10k deposit. Continue paying your deposit in weekly instalments until the home is complete, helping you lock in the property’s price sooner.

Collect Your Keys By final handover, your deposit is fully saved. Finalise your mortgage, move in, and start enjoying any stamp duty benefits you qualified for.

Why It Matters: Coposit’s deposit model complements your stamp duty savings. By splitting up-front costs, you can better manage your cash flow, investing in additional property upgrades or simply maintaining a financial safety net during the build.

6. Tips for Maximising Your Stamp Duty Savings

Research State Incentives: Some states have time-limited grants or additional concessions for first-home buyers. Buy Early: Purchasing at an earlier stage of construction often leads to larger stamp duty concessions—though it also means waiting longer for completion. Seek Professional Advice: Engage a conveyancer or property lawyer familiar with off-the-plan purchases to ensure you benefit from every possible incentive. Keep Track of Deadlines: Off-the-plan stamp duty concessions can require meeting specific lodging dates or completing certain paperwork on time.