The temporary expansion of the off-the-plan duty concession, initially designed to cease from 21 October 2025, is to extend for another 12 months.
What is changing?
The off-the-plan duty concession was expanded last year for property contracts entered into between 21 October 2024 and 20 October 2025. The expansion was originally designed to last for 12 months, and we discussed it in depth in a previous article. However, ahead of the delivery of the 2025-26 Victorian Budget, the Allan government announced a 12-month extension for the application of the expanded duty concession. Therefore, the expansion is now expected to cover contracts entered into between 21 October 2025 and 20 October 2026.
At the time of writing, no amending legislation has been made publicly available. It may be part of the State Taxes Amendment Bill 2025, which was read for the first time in the Victorian Parliament on 20 May 2025 and is expected to be publicly released within the next week or so.
Who does the announced change apply to?
The announced change should benefit purchasers and sellers of off-the-plan developments within strata subdivisions, such as apartments and townhouses, where their contracts are entered into between the relevant dates. Individual investors, companies, and trusts can still be eligible for the expanded concession. These parties do not qualify for the concession under the older rules, which exist alongside the rules containing the temporary expanded concession.
When do the changes apply from?
As it is an extension of an existing concession, we expect the expanded concession to continue seamlessly, catering for contracts of sale entered into up to 20 October 2026. However, the exact mechanics and details are subject to the amending legislation, which is not publicly available yet.
Our view
In our previous article and in various other forums, we have noted our disappointment that the expanded concession was only for a 12-month period and called for the concession to be made permanent. While the announced extension is at least a step in the right direction, we still strongly believe that the expansion should be made permanent, which will essentially reinstate the concession Victoria had for a long time before it was severely restricted in 2017. Incremental short-term extensions do not provide sufficient certainty or time to allow more residential development projects to get off the ground, particularly as the planning process can involve long lead times.
We also think it important to check the relevant amending legislation when it becomes available to consider whether there are any further changes to the operation and application of the expanded concession beyond the announced 12-month extension. All we have for now are announcements by the Government, however as with all things tax-related, the actual legislation and accompanying details are important.
What are the next steps?
If you have any questions about the announced change, contact your Pitcher Partners representative.
