As of July 1, 2023, the government has made some significant updates to the eligibility criteria for pensioners applying for stamp duty concessions. These changes are now more aligned with the First Home Owners Grant and other concessions, aiming to ease the financial burden on pensioners buying homes. However, the implications can be a bit complex.
Key Updates to Pensioner Duty Exemptions
New Purchase Price Thresholds:
Full Exemption: Homes valued at $600,000 or less.
Concession on a Sliding Scale: Homes valued between $601,000 and $750,000.
Previously, the full exemption threshold was $350,000, and the partial concession applied to homes valued up to $500,000.
One-Time Benefit Per Transaction:
The new rules apply the benefit to all parties involved in a transaction as a one-time use. Previously, eligibility was determined individually, allowing multiple applications of the concession in certain scenarios.
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 $350,000.
Example 2:
For a couple 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.
eConvey Pulse
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 eConvey, we specialise in navigating these complex landscapes. If you’re considering a property purchase or need advice on how these changes impact you, reach out to us today. Our expert team are here to help you maximise your benefits and ensure you make informed decisions. Don’t let the fine print catch you off guard—contact eConvey now on 03 5976 2700.