How Off the Plan Stamp Duty Is Calculated in Victoria

Most have been told stamp duty is based on the contract price, then discover off the plan purchases use a different calculation.

The short answer: In Victoria, off the plan stamp duty is generally calculated on the contract price minus eligible construction or refurbishment costs incurred on or after the day you sign, under section 21 of the Duties Act 2000 (Vic). The vendor supplies the off the plan figures, usually through a statutory declaration, and the State Revenue Office calculation can reduce the dutiable value enough for a first home buyer to fall under the $600,000 full duty exemption or into the $600,001 to $750,000 concession band.

That difference matters. A buyer might sign a $660,000 contract and still have a dutiable value below $600,000 once the construction deduction is applied. For a Melbourne first home buyer, that can mean the difference between no duty and a painful bill at settlement.

Why is off the plan stamp duty calculated differently in Victoria?

Off the plan duty is different because part of what you're buying does not exist yet. When you buy an established home, duty is usually assessed on the price you pay, or the market value if that is higher. Buy a finished $700,000 house in Reservoir and the starting point is $700,000.

With an off the plan contract, you may be signing before the slab is poured, before titles are registered, or while the building is only partly complete. The law recognises that part of the contract price relates to future construction or refurbishment. That future work can be deducted before duty is calculated.

In plain English, the calculation usually looks like this:

Start with the contract price.
Identify eligible construction or refurbishment costs after the contract date.
Deduct those costs from the contract price.
Calculate duty on the reduced dutiable value.
Apply any first home buyer exemption, first home buyer concession or other eligible duty concession to that reduced value.

The earlier you sign in the build, the more construction usually remains to be done. That often means a larger deduction and a lower dutiable value.

What is the formula for off the plan stamp duty?

The basic formula is: contract price minus eligible post-contract construction or refurbishment costs equals dutiable value. Duty is then assessed on that dutiable value, not automatically on the full contract price.

For example, say you sign a $660,000 contract for an apartment in a new low rise block in Brunswick. The developer's figures show that $130,000 of the price relates to construction after your contract date. The dutiable value would be $530,000.

That $530,000 figure is the key number for duty purposes. It is also the figure that can determine whether a first home buyer qualifies for the full exemption, the partial concession, or no first home buyer duty relief at all.

This is where buyers get caught. The bank, real estate agent and developer may keep talking about the contract price. Your duty position may turn on a different number altogether.

How does the SRO work out the construction deduction?

The vendor must provide the information needed to calculate the off the plan deduction, and they must use one of two SRO-recognised methods. The buyer doesn't usually create the figures from scratch.

The two methods are:

Fixed percentage method: a deemed construction percentage is applied based on the type of building and the stage of construction at the contract date.
Alternative method: the vendor uses actual project figures for land, GST, construction and other costs to calculate the eligible deduction.

Under the fixed percentage method, building types are grouped broadly into single lot dwellings, low rise developments and high rise developments. A townhouse, duplex, low rise apartment and high rise CBD tower may each produce a different deduction because the deemed construction component is not the same.

The stage of construction also matters. For a single lot freestanding build, common guide points include:

base stage, such as slab or foundations: about 15 per cent complete
frame stage: about 30 per cent complete
lock up: about 65 per cent complete
fixing stage: about 90 per cent complete
completion: 100 per cent complete

Read that backwards and you can see why timing matters. If the build is only 15 per cent complete when you sign, a much larger share of the construction is still ahead. If the property is nearly finished, there is much less left to deduct.

The vendor provides the adjusted dutiable value and supporting information, commonly through an off the plan statutory declaration. Your conveyancer then checks that figure and uses it when lodging the Digital Duties Formthrough Duties Online.

Worked example: how a first home buyer can pay no duty

A first home buyer buys a one bedroom apartment in Brunswick for $660,000. They sign early, while the building is still at an early construction stage. The vendor's off the plan figures show $130,000 of eligible construction after the contract date.

The calculation is:

contract price: $660,000
less eligible construction after signing: $130,000
dutiable value: $530,000

Because the reduced dutiable value is $530,000, the buyer may fall under the $600,000 full first home buyer duty exemption, assuming they satisfy the personal and residency requirements.

Now change one fact. Say the buyer waits and signs when the building is almost finished. Only $25,000 of eligible construction remains after the contract date. The dutiable value becomes $635,000.

That pushes the buyer above the full exemption threshold and into the $600,001 to $750,000 partial concession band. Same apartment. Same contract price. Very different duty result.

We've seen buyers assume they were out of range because the contract price sat above $600,000, then realise the off the plan dutiable value put them back inside the full exemption. We've also seen the opposite, where a buyer signed late in the build and the deduction was smaller than they expected. That is why the calculation should be checked before you rely on the number.

What are the two off the plan concessions in Victoria?

Victoria has the long standing section 21 off the plan calculation and a separate temporary concession for certain strata properties. Buyers often mix them up because both reduce duty by looking at construction costs after the contract date.

The long standing concession is the one many first home buyers and owner occupiers use. For contracts signed on or after 1 July 2017, it generally connects to the principal place of residence concession or the first home buyer duty exemption or concession. If you qualify, the construction deduction can reduce the dutiable value before the $600,000 and $750,000 first home buyer thresholds are tested.

For a broader overview of off the plan stamp duty concessions, it helps to separate the permanent calculation rule from temporary policy changes.

The temporary off the plan duty concession is broader. It is aimed at eligible apartments, units and townhouses in strata subdivisions with common property, such as a shared driveway, lobby, garden or common access area. It is open to all purchasers, including investors, companies and trusts, with no requirement that the property be your first home or principal place of residence. It does not apply to ordinary house and land packages that are not part of a strata subdivision with common property.

As at the current SRO guidance, the temporary concession applies to contracts from 21 October 2024 and before 21 October 2026, with a further Victorian Budget extension to 21 April 2027 announced and pending legislation. Because that final extension depends on legislation, buyers signing around those dates should check the position before signing.

Why does the signing date matter so much?

The signing date matters because the deduction is based on construction or refurbishment after the contract date. Work completed before you sign generally does not give you the same duty benefit.

That creates a real trade-off. Signing early may give you a better duty outcome, more choice of lots and more time to plan finance. It also means buying before the finished product exists, waiting longer for settlement and accepting more off the plan uncertainty.

Signing later can feel safer because you can see more of the building. Yet the duty deduction may be smaller because more construction is already done.

A weekend inspection at a display suite can feel casual, especially when the agent is focused on finishes, views and tram access. The duty calculation is not casual. Before signing, ask where construction is up to, whether the property is in a strata subdivision with common property, and when the vendor expects to issue the off the plan statutory declaration.

What should you ask before signing an off the plan contract?

Before signing, ask for the information your conveyancer needs to test the likely duty outcome. You may not get the final dutiable value immediately, but you can identify the risks early.

Helpful questions include:

What stage of construction is the development at today?
Is this a low rise, high rise, townhouse, apartment, unit or house and land package?
Will the property be part of a strata subdivision with common property?
Which off the plan concession does the developer expect to apply?
Has the vendor chosen the fixed percentage method or alternative method?
When will the off the plan statutory declaration be supplied?
Does the contract contain sunset date provisions?
Do the plans, lot entitlement and common property match what you think you're buying?
If you're a first home buyer, will you live in the property for the required period?

The duty figure is only one part of an off the plan review. Your conveyancer should also read the contract, section 32, plan of subdivision, owners corporation information, sunset provisions, adjustments and special conditions.

What does your conveyancer do with the off the plan figures?

Your conveyancer checks the legal paperwork, the eligibility position and the duty calculation before settlement. The goal is to make sure the correct dutiable value is used and the right concession is claimed.

In practice, that usually means checking:

the contract date against the construction stage
whether the property type fits the claimed concession
whether the buyer qualifies as a first home buyer or owner occupier
whether the vendor has supplied the required off the plan statutory declaration
whether the reduced dutiable value falls under $600,000, between $600,001 and $750,000, or above the first home buyer concession range
whether the Digital Duties Form uses the reduced dutiable value rather than the full contract price

The common mistakes are simple but costly. A full contract price is entered when the reduced dutiable value should be used. A statutory declaration is missing. The wrong concession is selected. A buyer assumes an investor-friendly temporary concession applies to a house and land package when it does not.

In our practice, the most useful review is often the one done before the buyer signs. Once a contract is signed, options narrow. Before signing, you can still ask better questions, understand the duty estimate and decide whether the timing and structure make sense.

FAQ

What is off the plan stamp duty in Victoria?

Off the plan stamp duty is land transfer duty on a property bought before construction or refurbishment is complete. In Victoria, the duty is usually calculated on the dutiable value after eligible post-contract construction or refurbishment costs are deducted, rather than automatically on the full contract price.

How is off the plan stamp duty calculated?

Off the plan stamp duty is calculated by starting with the contract price, subtracting eligible construction or refurbishment costs incurred on or after the contract date, then assessing duty on the reduced dutiable value. The vendor supplies the construction figures using either the fixed percentage method or alternative method, and your conveyancer uses those figures when preparing the duty assessment.

Do first home buyers pay stamp duty off the plan in Victoria?

Some first home buyers pay no duty on an off the plan purchase because the construction deduction can reduce the dutiable value to $600,000 or less. If the reduced dutiable value is between $600,001 and $750,000, a partial first home buyer concession may apply, provided the buyer meets the eligibility and residency rules.

Does the off the plan stamp duty concession still apply in 2026?

Yes. The long standing off the plan calculation continues to apply for eligible buyers, and the temporary concession for eligible strata apartments, units and townhouses also applies to contracts within its current window. The Victorian Government has announced a further temporary extension to April 2027, pending legislation, so buyers close to the end date should confirm the current rules before signing.

Why does it matter when I sign an off the plan contract?

The signing date matters because only construction or refurbishment costs incurred on or after the contract date are generally deducted. If you sign early, more work may remain and the dutiable value may be lower. If you sign when the property is nearly complete, the deduction may be small and duty may be assessed closer to the full contract price.

Who works out the off the plan dutiable value?

The vendor works out the off the plan dutiable value using one of the SRO methods and provides the required information, usually through an off the plan statutory declaration. Your conveyancer should then check the figure, test it against any first home buyer thresholds, and make sure the correct value is used in the Digital Duties Form.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne-focused conveyancing team that works with buyers across Victoria, including first home buyers purchasing apartments, townhouses and new builds. We review contracts and section 32 statements before clients sign, manage Digital Duties Forms, and check whether the correct duty exemption or concession is being claimed. Off the plan duty calculations are exactly the kind of detail we deal with day to day, especially when a buyer is close to a first home buyer threshold.

Sources we consulted

Need help checking your off the plan stamp duty?

Thinking about an off the plan apartment, unit or townhouse and not sure whether you'll actually owe stamp duty? Contact Pearson Chambers Conveyancing before you sign. We'll review your contract and section 32 complimentary, check the duty position, and help you understand where the dutiable value sits against the Victorian first home buyer thresholds.

Email contact@pearsonchambers.com.au.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.