ByLawyers News and Updates

First home – WA

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First home owner and off-the-plan duty changes

Changes have been introduced to the value caps for vacant land and established homes in WA that qualify for the first home owner concessional rate of duty, along with measures to extend and expand the off-the-plan duty concession.

The changes apply to transactions entered into from 21 March 2025.

RevenueWA expects to configure its systems to apply the new rates in early May 2025. Any eligible transactions entered into on or after 21 March 2025 that settle before the changes are implemented can be reassessed for a refund of duty after settlement.

Transfer duty – First home

First home owners buying an established or new home, or buying vacant land and then entering onto a contract to build a home on it and receiving a first home owners grant, can apply to be assessed at the first home owner rate of duty.

When the unencumbered value of a first home in Perth and Peel is:

  • up to $500,000 – no duty is payable;
  • between $500,001 and $700,000 – $13.63 per $100, or part thereof, above $500,000 is payable;
  • over $700,000 – full duty is payable, and no reduced rate applies.

When the unencumbered value of a first home in regions outside Perth and Peel is:

  • up to $500,000 – no duty is payable;
  • between $500,001 and $750,000 – $11.90 per $100, or part thereof, above $500,000 is payable;
  • over $750,000 – full duty is payable, and no reduced rate applies.

When the unencumbered value of vacant land purchased by an eligible first home buyer anywhere in WA, is:

  • up to $350,000 – no duty is payable;
  • between $350,001 and $450,000 – $15.39 per $100, or part thereof, above $350,000 is payable;
  • over $450,000 – full duty is payable, and no reduced rate applies.

Off the plan duty concession

For new off-the-plan homes within strata developments:

  • the expiry date of the existing duty concession is extended from 30 June 2025 until 30 June 2026;
  • no duty is payable for dwellings purchased before construction has commenced up to $750,000, with a 50% duty concession for properties valued above $850,000; and
  • a 75% duty concession is available for dwellings purchased while under construction up to $750,000, with a 37.5% duty concession for properties valued above $850,000.

This applies to all dwellings within strata and community title schemes, including townhouses and villas, not just multi-tiered developments.

Publication updates

The By Lawyers Purchase of Real Property (WA) guide has been updated, including the commentary and the Retainer Instructions – Purchase of Real Property.

 

Foreign purchasers – FED

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Ban on foreign purchasers buying established dwellings

Between 1 April 2025 and 31 March 2027, foreign purchasers are precluded from buying an established residential dwelling in Australia, unless an exemption applies. This includes persons with temporary visas and foreign-owned companies.

A foreign person is defined in s 4 of the Foreign Acquisitions and Takeovers Act 1975. See Guidance Note 2 Key Concepts published by The Treasury for further information. A foreign person can include individuals, corporations, trusts, and other entities.

The ban does not apply to newly constructed or off-the-plan properties. However existing restrictions for foreign purchasers continue to apply.

The ban applies to individuals holding temporary visas, who were previously allowed to purchase existing dwellings if they studied or worked in Australia and were approved by the Foreign Investment Review Board (FIRB). Such applications to the FIRB will no longer be approved.

Where a foreign purchaser has a Foreign Investment Review Board approval or exemption certificate issued before 1 April 2025, they can rely on it.

Exemptions

Exemptions to the ban mean that purchases are permitted:

  • by permanent residents;
  • by New Zealand citizens;
  • by spouses, as joint tenants, if one of them is an Australian citizen, permanent resident, or New Zealand citizen;
  • for investments that significantly increase housing supply or support the availability of housing supply; and
  • for properties intended for accommodation under the Pacific Australia Labour Mobility (PALM) scheme.

Issues to consider

Legal representatives need to be satisfied that foreign purchasers are aware of the consequences of contracting to buy an established dwelling if an exemption does not apply. The ATO will enforce the ban through enhanced screening of foreign investment proposals for residential properties, and penalties apply to breaches. The Government will fund the ATO from 2025-26 financial year to enforce the ban.

Publication updates

By Lawyers Conveyancing publications in all states have been updated, including the commentaries in the Purchase of Real Property guides and 1001 Conveyancing Answers. They include in-depth information on determining who is a foreign person and whether exemptions from the ban apply.

Conveyancing cases – VIC

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A selection of recent conveyancing cases has been added to By Lawyers 1001 Conveyancing Answers (VIC) as part of a review by our property author Russell Cocks.

The following conveyancing cases are among those that have been added:

Additional information has also been added about:

  • Deposit or option fee – A preliminary payment pursuant to a contract may be a deposit that is potentially refundable to the purchaser if the contract does not proceed, or an option fee that is not refundable even if the contract does not proceed.
  • Lessee’s right to quiet enjoyment – A lessor’s failure to repair defective premises may constitute a breach of the lessee’s right to quiet enjoyment.

The extensive 1001 Conveyancing Answers (VIC) publication is available in the Reference materials folder on the By Lawyers Conveyancing (VIC), Mortgages (VIC), and Leases (VIC) matter plans to assist property lawyers and conveyancers in understanding more detailed aspects of the conveyancing process and addressing clients’ issues quickly.

Foreign resident capital gains withholding – FED

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The foreign resident capital gains withholding tax regime is changing.

With effect from 1 January 2025:

  • the withholding rate increases from 12.5% to 15%; and
  • the $750,000 threshold is removed.

The foreign resident capital gains withholding regime applies to sales of taxable Australian property, including vacant land, residential property, and commercial property.

Until 1 January 2025, the regime applied only to properties valued at $750,000 or more. From 1 January it applies to all properties.

Buyers must withhold a percentage of the purchase price and pay it to the Australian Taxation Office (ATO) instead of to the seller unless the seller is an Australian resident and provides evidence of that fact by way of a clearance certificate from the ATO. Sellers who are foreign residents can apply to the ATO for a variation notice and potentially reduce the amount required to be withheld.

Without a clearance certificate or a variation notice, all buyers must withhold the required percentage of the purchase price, even if the seller is an Australian resident.

For sales of taxable real property before 1 January 2025, the foreign resident capital gains withholding amount was 12.5%. From 1 January 2025 it is 15%.

The effect of these amendments is that ALL sellers of real property in all states and territories, whether Australian residents or foreign residents, need to apply for a clearance certificate from the ATO and provide it to the buyer before the completion of the sale. If they do not, then the buyer must pay 15% of the purchase price to the Australian Taxation Office on settlement. For those jurisdictions with electronic conveyancing, this may be able to be done via the settlement platform.

All By Lawyers publications that cover foreign resident capital gains withholding have been updated to reflect this change. This includes the Conveyancing and Property and Estates guides in each state and territory, Retirement Villages (NSW), and 1001 Conveyancing Answers (VIC), (NSW), and (QLD).

Transfer duty concession – VIC

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A new and temporary off the plan land transfer duty concession is available in Victoria.

The concession applies to the purchase of strata dwellings off the plan.

Contracts for apartments and townhouses purchased off the plan that are entered into from 21 October 2024 attract the concession, which is available for 12 months.

The new transfer duty concession will significantly reduce duty payable by eligible purchasers. For example, the duty payable on a $620,000 apartment will be reduced from $32,000 to $4,000.

Eligible purchasers will be able to deduct the construction costs incurred on or after the contract date from the dutiable value of the property. Land transfer duty will then be calculated on this reduced amount. Other concessions may also apply based on this reduced amount.

Eligibility

The concession is available to all purchasers, whether owner occupiers or investors, individuals, companies, and trusts. The purchaser is not required to also be eligible for either the principal place of residence duty concession, or the first home buyer duty exemption or concession.

Eligibility for the new transfer duty concession is assessed at the date the contract of sale is entered into, irrespective of whether settlement occurs before or after the end of the 12-month window during which the concession applies.

Contracts signed before the concession’s commencement date but settled during the 12-month window are not eligible.

How to apply

Applications are made through Duties Online by completing the Digital Duties Form.

For further information, including some useful examples of how the concession is calculated, see the Temporary off-the-plan duty concession page published by the State Revenue Office Victoria.

By Lawyers – Always up to date

The By Lawyers Purchase of Real Property (VIC) guide, including the Full Commentary and the Retainer Instructions precedent, has been updated.

First home buyer – WA

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A first home buyer purchasing an established or newly built home, or building a new home, can apply to be assessed at a new first home buyer threshold and rate of duty.

The first home buyer duty concessions apply as follows:

  • If the unencumbered value of a first home is up to $450,000 then no duty is payable. Previously the threshold was $430,000.
  • If the property’s unencumbered value is between $450,001 and $600,000, then duty is payable at a rate of $15.01 for every $100 above $450,000. Previously, this threshold was $430,001 to $530,000, and the rate of duty was $19.19 for every $100 over $430,000.
  • If the unencumbered value of the property is over $600,000, then the buyer is liable for the full amount of duty, and no reduced rate applies. The top threshold was previously $530,000.

For vacant land, transfer duty exemptions are available on land valued at $300,000 or less, and concessions are available on land valued at $400,000 or less.

The new thresholds and rate applies to agreements entered into after 9 May 2024. Agreements entered into before 9 May 2024 are not entitled to the benefit of the new thresholds and rate even if settlement occurs after that date.

Any agreements entered into on or after 9 May 2024 assessed using the previous thresholds or rate can be re-assessed taking into account the new thresholds and rate.

The duty concession is in addition to the First Home Owner Grant, which provides a $10,000 lump sum payment to first home buyers constructing a new residential property.

The By Lawyers Conveyancing (WA) publication has been updated accordingly, including the Purchase of Real Property commentary and the Retainer Instructions – Purchase of Real Property precedent.

Duty concession – TAS

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A duty concession of 50% is now available to eligible buyers of newly built medium-density housing in Tasmania.

The new measure is intended to encourage the construction of new apartments and units.

The concession applies to certain apartments and off-the-plan or under-construction units, with a dutiable value of up to $750,000.

The 50% duty concession is available for agreements for sale entered into between 1 July 2024 and 30 June 2026 inclusive. The transfer must occur before 30 June 2031.

The duty concession is available to all Tasmanians who meet the eligibility criteria, not just first-home buyers. To be eligible, transferees must be natural persons, not a company or trust, and be over 18 years of age. At least one transferee must be an Australian citizen or a permanent resident at the date of the dutiable transaction. If a first home buyer grant has been made for the same transaction, the 50% duty concession is not available.

An eligible dwelling comprises a lot in a strata scheme or a dwelling conjoined with one or more other dwellings and must not have had an occupancy permit granted when the agreement for sale was executed.

For more details on eligibility criteria and how to apply, see the Property Transfer Duty page on the State Revenue Office of Tasmania website.

Eligible transferees who have already paid full transfer duty on an eligible property can apply for a 50% refund.

The By Lawyers Conveyancing (TAS) publication has been updated accordingly, including the Purchase of Real Property commentary and the Retainer Instructions – Purchase of Real Property precedent.

Publication reviews – All states

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Publication reviews are part of By Lawyers’ commitment to quality and keeping our subscribers up to date with changes in practice and procedure.

Our publication reviews target commentaries, or precedents, or both. The purpose of the reviews is to update and ensure consistency in styles, formatting, hyperlinks, naming protocols and, if necessary, the substantive content.

The results of a review can include new, amended, or deleted commentary, commentary headings, and precedents.

Sometimes the title or location of a precedent will be altered.

Occasionally there are amendments to the sequence of folders, commentary headings, precedents, and hyperlinks on the matter plan.

Any changes applied will be reflected in an amended matter plan.

Practitioners using our guides will not always realise when a publication review has been conducted. However, sometimes the resulting changes will be apparent, and amendments or enhancements might take a moment to get used to.

Lately, our in-house team, in conjunction with our authors in the various jurisdictions around Australia, have been focussed on reviewing the Full Commentaries in the following publications:

Some of these are still a work in progress, so keep an eye out for any changes.

We love to help our subscribers, and we love feedback. If you have any questions or concerns about changes arising from a publication review, do not hesitate to let us know. We are always happy to discuss any change we have made, or consider others. If you can’t find a section of commentary or a precedent, send us an email and we will point you in the right direction.

And, if you like the changes we have made, please take a moment to let us know so we can continue helping you to enjoy practice more.

Our email is: askus@bylawyers.com.au

Land tax – NSW

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From 1 February there are changes to land tax exemptions in New South Wales. A new minimum ownership requirement applies to applicants seeking the principal place of residence land tax exemption.

A principal place of residence is generally exempt from land tax. Only one property can be claimed as a principal place of residence, for either an individual or a family. If a principal place of residence is used for non-residential purposes, then there will be a reduction of land tax for the proportion used as a residence.

A principal place of residence exemption can only be claimed by natural persons, not corporations or trusts except for a concessional trust: s 3B of the Land Tax Management Act 1956.

Following the amendments, s 15 of Schedule 1A of the Act now imposes a minimum ownership requirement in order for a property owner, or owners, to access the principal place of residence exemption. There is now no entitlement to the exemption unless all of the people who use and occupy the land as a principal place of residence together hold at least a 25% interest in the land.

Those who currently claim the principal place of residence exemption, but collectively have an interest in the land of less than 25%, can continue to claim the exemption as a transitional measure up to 31 December 2025.

The requirement does not apply to participants in an approved shared equity scheme under s 281 of the Duties Act 1997.

The By Lawyers Conveyancing (NSW) publication has been updated accordingly.

Conveyancing cases – VIC

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New conveyancing cases have been added to By Lawyers reference manual 1001 Conveyancing Answers (VIC) as part of a review by our author Russell Cocks. The publication has been generally updated for recent developments in the law and practice.

New cases on various aspects of the conveyancing process have been added, including:

Practical commentary has also been added about setting up and running electronic workspaces in the electronic lodgement platforms.

1001 Conveyancing Answers (VIC) is available in the Reference Materials folder on the matter plan in all Victorian By Lawyers conveyancing and property guides. It contains many conveyancing cases with summaries and hyperlinks. It assists property lawyers and conveyancers to understand more complex issues in the conveyancing process and solve problems for their clients.

 

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