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PPR Concession

Published by Pearson Chambers Conveyancing on
PPR Concession

When it comes to buying a home, understanding the financial implications and opportunities available to you is crucial. One such opportunity, particularly for those purchasing property in Victoria, is the Principal Place of Residence (PPR) concession. This concession can significantly reduce the amount of stamp duty payable, making it an essential consideration for potential home buyers.

What is the Principal Place of Residence PPR Concession?

The PPR concession is a financial relief on stamp duty, specifically designed for individuals purchasing a property they intend to live in as their main residence. This concession is not limited to first-time buyers and applies to a range of property values, offering a substantial saving on the overall cost of purchasing a home.

Eligibility Criteria for PPR Concession

To qualify for the PPR concession, there are specific criteria that must be met:

  • Timing of Occupancy: The buyer is required to establish the property as their main residence within 12 months from the date of acquiring possession, which is generally the date of settlement. 
  • Duration of Residence: It is essential for the buyer to continuously live in the property for a minimum duration of 12 months. 
  • Property Value Cap: The concession applies to properties valued up to $550,000.

Calculation of Stamp Duty under Principal Place of Residence Concession

The amount of stamp duty payable under the PPR concession varies based on the property's value:

  • Properties valued between $130,000 and $440,000:
    • Stamp duty is calculated at $2,870 plus 5% of the dutiable value exceeding $130,000.
    • This represents a 1% reduction compared to the standard rate.
  • Properties valued between $440,000 and $550,000:
    • Stamp duty is calculated at $18,370 plus 6% of the dutiable value exceeding $440,000.
    • This equates to a duty reduction of $3,100 compared to the standard rate.

Principal Place of Residence Concession on Vacant Land

The PPR concession also applies to vacant land purchases, with specific conditions:

  • Occupancy Requirements:
    • The buyer must occupy the newly constructed home within 12 months of the date they can lawfully live in it (usually the issuance date of the occupancy certificate), or within 36 months of the settlement date.
  • Value Consideration:
    • Only the value of the vacant land is considered for the concession, excluding the value of any building contract.

Compliance and Failure to Meet Principal Place of Residence Requirements

Meeting the PPR requirements is crucial:

  • Consequences of Non-Compliance:
    • If the requirements are not met, the standard rate of duty is charged.
    • Buyers must notify the Commissioner of State Revenue within 30 days if they become aware they will not meet the PPR requirements after receiving the concession.

Conclusion

Understanding the Principal Place of Residence concession can lead to significant savings on stamp duty when purchasing a home in Victoria. For detailed advice and assistance with your property purchase, including understanding the intricacies of the PPR concession, contact Pearson Chambers Conveyancing at 0421 058 106, email us at contact@pearsonchambers.com.au, or visit our website at www.pearsonchambers.com. Our experienced team is here to guide you through every step of your property journey.

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