Tax Benefits - Off the Plan Purchase

⏰ Temporary concessions expire 20 October 2026
(Extension to 21 April 2027 pending legislation)

1. Stamp Duty Concession — No Value Cap

Under the Victorian Government's temporary off-the-plan concession (introduced October 2024), purchasers can deduct construction costs from the dutiable value when calculating stamp duty.

No value threshold — applies to properties of any price
Up to 75% deduction for multi-storey builds (60% for low-rise townhouses)
Duty calculated on the reduced amount only
Contract must be signed before the concession expires

Example Savings

For a $1,750,000 off-the-plan townhouse where 60% is construction costs ($1,050,000):

Scenario	Dutiable Value	Approx. Duty
Without concession	$1,750,000	~$96,000
With concession (no construction started)	$700,000	~$37,000
Saving		~$59,000

2. Open to All Buyer Types

Before October 2024, the off-the-plan concession was restricted to first home buyers and owner-occupiers with value caps. The temporary concession removes all restrictions:

Domestic investors
Foreign buyers
Companies and trusts
First home buyers and owner-occupiers

No requirement to live in the property as your principal place of residence.

3. Negative Gearing Retained (New Builds)

From the Federal Budget 2026–27 (announced 12 May 2026):

Negative gearing is being limited to new builds only from 1 July 2027
Established/existing property purchased after 12 May 2026 will lose negative gearing
New builds like 21 Patricia Street retain full negative gearing — deduct rental losses against your other income

4. 50% CGT Discount Retained (New Builds)

The 50% Capital Gains Tax discount is being reformed for established property. However:

Investors who acquire new homes can choose either the 50% CGT discount or the new arrangements when they sell
Changes apply to gains arising after 1 July 2027
New build investors are protected

5. Maximum Depreciation Deductions

A brand new property attracts the highest possible tax depreciation deductions:

Building (Division 43): 2.5% per year on construction cost over 40 years
Fixtures & fittings (Division 40): Immediate or accelerated deduction on appliances, carpets, blinds etc.
No previous owner means no reduction in claimable amounts

6. Foreign Buyers — Permitted Purchase Category

Under FIRB (Foreign Investment Review Board) rules:

Foreign buyers are restricted from purchasing established dwellings
Off-the-plan / new dwellings are an approved purchase category for foreign investors

Summary

Benefit	Status	Expires
Stamp duty concession (no cap, all buyers)	Active	Oct 2026 / Apr 2027
Negative gearing (new builds)	Retained	Permanent for new builds
50% CGT discount (new builds)	Retained	Permanent for new builds
Full depreciation	Active	Permanent
Foreign buyer eligibility (FIRB)	Active	Permanent

Disclaimer: This information is general in nature and does not constitute financial, tax or legal advice. Tax benefits depend on individual circumstances. Prospective purchasers should obtain independent professional advice regarding their specific situation. Information is current as at June 2026 and subject to legislative change. The Victorian temporary concession requires contracts signed within the eligibility period and applies only to strata subdivisions with common property.

Off-the-Plan Tax Benefits