First Home Owners & Stamp Duty

First Home Owners

First Home Owners & Stamp Duty

What You Need to Know About Stamp Duty if You are a First Home Owner

First Home owners are able to claim a concession for stamp duty if they reside in the property they have just purchased commencing in the first 6 months  and continue residing for 12 months.  If they fail to do so, then the Duties Act 2001 provides that the Commissioner of State Revenue may reassess the duty to be paid.

The concern rests where a buyer takes the property subject to a tenancy, and that tenancy doesn’t end in the first 6 months.

In Commissioner of State Revenue v Di Sipio & Anor [2015] QCA 198, the Court of Appeal had to consider whether the trigger to allow the Commissioner to reassess was open to it.

In that case, the buyers had bought a property in August 2011, however was unable to move in until April 2012.  The Commissioner reassessed their stamp duty on an investment rate, and not on a first home owner rate.

The Court considered whether the passive ownership would be sufficient to “dispose” of the property through leasing it, or whether some overt act would be required.

In concluding the later, Chief Justice Holmes noted that the trigger could not activate merely because a buyer had bought a property.  The buyer must have done something positive to allow the occupier to remain in possession of the property (ie, by granting a further lease).

This case clarifies a clear point of confusion in the Duties Act, namely whether a stubborn tenant could end up costing a buyer a significant amount of money.  This, of course, does not give licence to a buyer to act fraudulently in claiming concessions.