Do you pay stamp duty when buying off the plan?
Stamp duty is payable on the market value of consideration paid for a property (whichever is higher), However, there are some stamp duty concessions available to off-the-plan purchases.
Following amendments to the Duties Act in 2017, to qualify for a stamp duty concession on off-the-plan purchases you must occupy the property as your principal place of residence for a minimum of 1 year following settlement, and the market value of the property must be less than $550,000 at the time of sale.
Calculating the market value of the property at the time of sale can be difficult, as the vendor can, at their discretion, use the fixed percentage method or the alternative method calculate to calculate the value. For example, if you purchase of a townhouse for $1,200,000 off-the-plan and where only the foundations had been completed, the stamp duty using the fixed percentage method would be approximately $24,370, whereas the alternative method would calculate stamp duty to be $66,000.