As published in The Q Review Autumn 2020 Magazine. Follow the link to Subscribe and receive your FREE copy each quarter!
WA Government Announces Stamp Duty Rebate for “Pre-Construction” Apartment Purchases
Finally, the McGowan State Government is pulling the right levers to kickstart WA’s construction industry and promote local investment.
The positive impact of this stamp duty rebate is going to be massive.
Here are the key points you need to know:
- From 23 October 2019 to 23 October 2021 buyers who enter into a pre-construction contract to purchase a new unit or apartment within WA will receive a massive 75% rebate of their stamp duty.
- There is no cap on the eligible purchase price, however the maximum rebate you can receive is capped at $50,000.
- The rebate applies to all buyers including natural persons, companies and trusts.
- The rebate also applies to both owner-occupiers and investors (Editor – though please talk to CapitalQ if you are considering a new unit or apartment purchase as an investment).
- The stamp duty rebate also applies to Foreign Buyers (Editor – an interesting policy decision given the recently introduced Foreign Buyers Duty)!
- An important requirement to note is that the development must not have commenced construction at the time you enter the contract to buy (ie. the development must be in the “pre-construction” stage).
- Construction must be completed within 36 months of the contract date.
- Multiple stamp duty rebates are available for the one taxpayer for separate apartment purchases (including within the same development).
An example of the rebate in action, as provided by the WA Government, is as follows –
“James enters into a preconstruction contract in January 2020 to purchase an apartment in a multi-tier development for $1,000,000.
Construction is completed in December 2021 and titles are issued in January 2022.
Settlement occurs and James pays duty of $42,615.50 at the residential rate.
He is registered on the certificate of title in January 2022.
Within six months of the settlement date, James applies for the rebate.Duty
James is paid a rebate of $31,961.62, which is 75% of the duty he paid on the contract.”
With this recent announcement, we can’t think of a better time to secure your dream apartment than now.
Though be aware, the new apartment market will likely shift up as demand for pre-construction projects increases as people look to capitalise on this new financial incentive.
As with any property purchase, TAG Finance can assist with all aspects of securing finance.
Call me on 0413 787 441 and you can learn more about Tag Financial Group at www.taggroup.com.au