House & Land Package – Save on Stamp Duty

Are you looking at buying a House & Land package? Here’s some tips on how you can minimise your Stamp Duty cost.

The goal is to pay Stamp Duty on only the Land value and not the House. To achieve this you should:

• Chose a building contractor that it not associated to the vendor of the land,
• If the building contractor and the vendor of the land are associated, ensure you have separate contracts for each arrangement.

Example (taken from Michael Butler (TEN) 19/10/15): A purchaser buys a vacant lot of land for $200,000. Three months after transfer, the purchaser receives three quotations for the construction of a residence. By coincidence the builder with the most competitive bid for the building contract is the same person that sold the vacant lot of land to the purchaser.

In this case, the two transactions will not be seen to form part of the same arrangement. Therefore, the consideration for the transfer of the land will consist only of the $200,000, and stamp duty will be payable only on that amount.