What stamp duty incentives are offered to downsizers

A practical and efficient way to reduce housing costs is to downsize, especially for senior citizens and empty nesters who are settling in retirement. Pensioners in certain states and territories are eligible for stamp duty incentives. This allows them to potentially save thousands of dollars on downsizing their homes.

Currently, two states – Victoria and Tasmania – and the two territories – the Australian Capital Territory and Northern Territory – offer stamp duty concessions to seniors and pensioners to assist them in downsizing to a more suitable home. While the rest of the states offer no senior-specific plans, Western Australia does have a general concession that allows downsizers to use off-the-plan units, regardless of age.

But a closer examination of these stamp duties incentives reveals that they generally correspond with houses prices in regions rather than capital cities. This makes them more appealing for downsizers who are looking to move from urban areas.

Below is a list of states that offer incentives to seniors and pensioners looking to downsize.

Victoria

Victoria offers a complete waiver of stamp duty for eligible pensioners who purchase home worth up to $330,000. The full value of the incentive is $12,750. The duty concession decreases until $750,000 is reached.

Only one incentive can be claimed and must be used on a home the buyer intends to live in. It can also be combined with stamp duty discounts, announced by the state government in November last year as part of COVID-19’s economic recovery package. This cuts tariffs by 50% for newly constructed residential properties and by 25% for existing homes and vacant land, provided they are purchased before 2021.

These are the full details and eligibility requirements Victoria’s pensioner duty exemption scheme can be accessed here.

Tasmania

Eligible pensioners can get a discount of 50% on transfer duties in Tasmania, which is approximately $7,000, if they sell their home and move to another property. The new property must not exceed $400,000 in dutiable value and be less than the old home.

The downsizer must also be a homeowner who purchased the house between 10 Februar 2018 and 30 June 2022. The plan was to be terminated on 30 June 2020. However, the extension was granted for two more years.

More information is available at Tasmania’s duty concession for pensioners by clicking here.

Australian Capital Territory

Eligible pensioners living in the ACT are exempt from stamp duty on home purchases up to $440,000. This allows them to save $9360. For properties less than $570,000, you can also get corresponding transfer duty discounts. The scheme will be available until 30 June.

If they plan to downsize, but are not yet retired, they may be eligible for a $11,400 discount on stamp duties if they are owners of single residential blocks or apartments and townhouses that cost up to $750,000.

Additional details on the ACT’s Pensioner Duty Concession Scheme (PDCS) can be accessed here.

Northern Territory

Eligible pensioners from Northern Territory can receive a $10,000 incentive in stamp duty for purchases up to $750,000. Downsizers who purchase properties valued at $292,300 don’t have to pay transfer duty. This scheme will be in effect until June 30th.

You can find all the details here NT’s Senior, Pensioner and Carer Concession (SPCC) via this webpage.

Apart from these state-sponsored stamp duty incentives, downsizers can access the Australian Taxation Office’s downsizer contribution scheme that allows them to contribute up to $300,000 from the sale of their home into their super.

How does the stamp duty exemption compare to the median house price in Australia? You can see a better picture by looking at the tables below.

Stamp duty concessions

Median dwelling prices

It is not easy to downsize your home by buying a smaller house or moving into a smaller one. You need to plan carefully and prepare for many things. These useful tips will assist you.