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Disposal and its effect on your concession

If you claimed a transfer duty concession for homes and wish to keep the concession in full, you can’t dispose of part or all of the property before moving in or within 12 months of when you first occupy it. For transfer duty purposes, ‘dispose’ means lease, sell, transfer or otherwise grant another person exclusive possession to the property or part of it.

Here are some common examples of when you could dispose without realising:

  • You grant a lease extension to an existing tenant before moving in.
  • You lease out a room within 12 months of moving in.
  • You sell or transfer part of your interest in the property within 12 months of moving in.
  • Within a few months of moving in, you lease out your home using an online accommodation sharing platform (e.g. Airbnb, Booking.com, Stayz) while you take holidays.
  • An existing tenant continues to live in the home after their lease expires or for more than 6 months after settlement, whichever comes earlier.
  • A previous owner does not move out within 6 months.

If you transfer an interest or share in your home to your spouse as a gift, your transaction may not be considered a disposal.

Demolishing a home

Although demolishing a home is not a form of disposal, you will lose a transfer duty concession if you knock down the existing home before living there as your principal place of residence. Even if you eventually live on the property after rebuilding, you will not be able to keep any concession that you have claimed.

Not meeting the concession eligibility obligations

If you have claimed the concession but now don’t meet an eligibility requirement, you must notify us within 28 days by completing a notice for reassessment (Form D2.4). You can either:

You might not lose the concession if you can’t occupy the home because of an intervening event, but you still need to notify us.

If we do a reassessment, you will have to pay back some transfer duty. You may also have to pay unpaid tax interest and penalty tax, depending on your circumstances. This will be explained on your reassessment notice if you receive one.

The sooner you tell us you’re no longer meeting an eligibility requirement, the better your chances of paying lower interest and penalty amounts.

Losing some of the concession

If you claimed a home concession or first home concession, you must move in within 12 months.

If you claimed the first home vacant land concession, you have 2 years to build and move in.

If you moved in on time, but then sold, leased, gifted or otherwise disposed part or all of the property  before the 12 months finishes, you may still be eligible for a partial concession (i.e. you’ll only need to pay back a part of your transfer duty concession).

Estimate what you might pay back

Follow these steps to estimate the amount of transfer duty you may have to pay back.

  1. Use our estimator to work out how much duty you would have paid if you didn’t get a concession.
  2. Work out the actual (concessional) amount of transfer duty you paid. This will be on your transaction documents in your settlement statement from your conveyancer. (You can use the estimator if you are unsure.)
  3. Subtract  your step 2 amount from your step 1 amount to calculate the total discount you received.
  4. Divide your step 3 amount by 365 to work out your daily discounted amount.
  5. Work out the number of days in the 12 months where you didn’t live in your property (i.e. the number of days from your disposal date to the 1-year anniversary of your moving in).
  6. Multiply your daily concession amount (step 4) by the number of days where you didn’t live in your property (step 5).
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