The government is changing the rules regarding stamp duty from July 1st 2017. After that date an exemption from paying stamp duty on the purchase price will be available to first home buyers only.
At present the law allows an exemption of stamp duty payment on the costs of building and its associated charges where a contract is entered into before construction commences. If a contract is signed after commencement of construction only the amount of costs to complete construction at the date of signing will qualify for exemption.
Current Stamp Duty status
Under the Victorian States Taxation Acts Amendment Act 2008 a ‘deemed’ allowance of 60% is set off against the total purchase contract consideration; this represents the building cost quota and is applicable to ‘multi-lot low rise buildings up to 3 storeys’.
Example: Total Purchase Contract price $475,000 minus 60% ($285,000) leaves a residue of $190,000 representing the land value which is dutiable.