Off-the-plan stamp duty concessions in 2026: how they work

Buying off-the-plan has long been a strategy to reduce upfront purchase costs, and one of the biggest potential savings comes from stamp duty concessions. In 2026, these concessions remain available in several states, but they are not automatic. The real value depends on understanding two things: how the construction-cost deduction works and the timing trap that can erode or even eliminate those savings.

This article explains the mechanics of off-the-plan stamp duty concessions in 2026, the risks you need to manage, and how they interact with first-home buyer schemes and lending rules. We’ll use concrete numbers and current policy data — including the RBA cash rate of 4.35%, a lowest variable rate of 5.69%, the APRA serviceability buffer of 3%, and the DTI cap of 6x that took effect in February 2026.

If you are considering an off-the-plan purchase, read this before signing a contract.

The construction-cost deduction: the core of the saving

In most Australian states, stamp duty (transfer duty) is calculated on the dutiable value of the property. For a completed home, that value is the purchase price. For an off-the-plan purchase, the dutiable value can be reduced by the value of the building works that have not yet been started or completed at the time of the contract.

This is the construction-cost deduction — you pay duty only on the land component, not on the cost of construction. The result is a significantly lower stamp duty bill at settlement.

How much can you save? Consider a typical off-the-plan apartment in Melbourne in 2026.

· Purchase price: $800,000 · Estimated land value (as determined by the Valuer-General): $400,000 · Construction costs: $300,000 · Concession: dutiable value reduces to $400,000 (land only)

Using Victoria’s 2026 transfer duty rates for a $400,000 dutiable value, stamp duty is approximately $11,000. On the full $800,000 price it would be about $31,000. That is a saving of $20,000.

The rules around which costs are deductible vary by state. In NSW, for example, the concession applies to both the construction costs and any developer contributions. In Queensland, the deduction is capped for purchases above certain thresholds. In Western Australia, a similar concession exists for off-the-plan apartments but is limited to first-home buyers.

Important: You must ensure the contract clearly itemises the land value and the building costs. If the developer does not provide this breakdown, you cannot claim the deduction. Always have a conveyancer or solicitor verify the numbers.

The timing trap: when the savings disappear

Off-the-plan purchases involve a significant time lag between signing the contract and settlement — often 12 to 24 months. That gap is where the timing trap lies.

Trap one: changes to duty rates or thresholds.
Stamp duty rates are set by state parliaments. While they do not change often, they can. If your settlement occurs in a new financial year with higher rates or reduced thresholds, your expected saving might be smaller. For example, in NSW, the 12-month rate freeze for off-the-plan purchases ended in 2025; in 2026, buyers must claim the concession at settlement based on the rates in force at that time.

Trap two: reassessment of dutiable value.
In some states — particularly Queensland and Victoria — the Office of State Revenue may reassess the land value at settlement if the property has increased in value significantly during construction. If the land component has appreciated, your dutiable value rises and your saving falls.
Example: You purchase a $700,000 townhouse with land valued at $350,000. By settlement the land is worth $400,000. Your duty is now calculated on $400,000, not $350,000 — an extra ~$2,500 in duty.

Trap three: loss of concession if you sell before settlement.
Most states require the off-the-plan buyer to occupy or hold the property for a minimum period — often 12 months — or the concession is clawed back. If you assign the contract or sell before completion, you may be liable for the full stamp duty on the original purchase price plus penalties.

Trap four: financing changes.
Your loan approval in 2026 is subject to stricter serviceability rules. The APRA buffer of 3% means you must pass a rate test at 8.69% (current variable 5.69% + 3%). Additionally, the DTI cap of 6x income — a macroprudential measure effective from February 2026 — may mean that even if you qualify at exchange, your borrowing capacity could be lower at settlement if your income hasn’t increased or your debt has.

Consider this real scenario:

· Income: $100,000
· Max loan under DTI cap: $600,000 (6x)
· Property price: $800,000
· Deposit: 5% ($40,000) via the First Home Buyer Guarantee (FHBG)
· Loan required: $760,000

That exceeds the DTI cap by $160,000. Unless you can increase your deposit or find a co-borrower, you cannot settle. If settlement is delayed and you cannot meet finance requirements, you risk losing your deposit — and any stamp duty saving is irrelevant.

How off-the-plan concessions interact with first-home buyer schemes in 2026

The First Home Buyer Guarantee (FHBG) from Housing Australia has been expanded from July 2026. There is no income cap, and you can buy with a 5% deposit with no lenders mortgage insurance (LMI). Price caps were also updated:

· Sydney: $1.5 million
· Melbourne: $950,000
· Brisbane: $1 million
· Perth: $850,000

If you are a first-home buyer purchasing off-the-plan, you can potentially stack the stamp duty concession with the FHBG and the First Home Owner Grant (FHOG) — but only for new homes.

In Victoria, the FHOG for off-the-plan homes up to $750,000 is $10,000. Combined with a stamp duty saving of $20,000 (from the construction-cost deduction), a first-home buyer could reduce upfront costs by up to $30,000 — a significant help for those on a single income.

Caveat: The FHBG scheme uses a fixed purchase price cap. The off-the-plan stamp duty deduction does not affect that cap – the cap applies to the contract price, not the dutiable value. So if your off-the-plan apartment costs $1.2 million in Sydney, you are eligible for the FHBG (cap $1.5M) but still need a 5% deposit of $60,000. The stamp duty saving may be around $15,000–$20,000, but you still need to meet the DTI cap.

State-by-state snapshot (2026)

Because the rules differ significantly, here is a brief guide to the major jurisdictions. Remember: always check the current thresholds with your state revenue office.

New South Wales · Off-the-plan concession: Duty calculated on the land value only (no dutiable value includes building costs).
· No maximum price limit for the concession.
· Claim at settlement; no minimum holding period since 2024 adjustments.
· First-home buyer exemption and concession thresholds: $1 million for full exemption, $1.2 million for concession (2025-26 rates, may be indexed).

Victoria · Off-the-plan concession: Applies to both land and building components, but you can claim a deduction for construction costs if the contract is signed before construction commences.
· Full exemption for first-home buyers up to $750,000 (including the FHOG boost).
· No time limit on claiming, but duty reassessment can occur if settlement is delayed beyond 24 months.

Queensland · Off-the-plan concession: Deduction of up to $300,000 in construction costs for eligible properties.
· Must be a new residence; cannot be a hobby or investment purpose for the concession.
· Cap applies to price: property must be below $1.5 million to claim the full concession.

Western Australia · Off-the-plan concession: First-home buyers only; duty on land only for apartments under construction.
· Price cap: $850,000 for apartments, $1 million for houses.
· Construction must be completed within 2 years.

How to claim and what to watch for

1. Include a breakdown in the contract
   The developer must provide a separate valuation of the land and the building works. This is often in the “sunset clause” schedule. If it’s missing, your conveyancer should request it.

2. Notify the state revenue office
   When you lodge the duty assessment, you or your solicitor must include the contract and the land-value breakdown. Do not assume the automated system will apply the concession – explicitly request it.

3. Check the sunset date
   Many off-the-plan contracts include a sunset date – the latest date the developer can complete. If settlement occurs after that date, the contract may be terminated. If you rely on a stamp duty saving, a delayed completion can cause you to lose it.

4. Confirm your DTI capacity at settlement
   Given the 6x DTI cap and the APRA buffer, ask your lender to model your borrowing capacity at the estimated settlement date. Use the lowest variable rate of 5.69% plus 3% buffer, and assume no income growth. If you cannot service the loan under those conditions, a bigger deposit or a lower-priced property is essential.

FAQ: off-the-plan stamp duty in 2026

1. If I buy an off-the-plan apartment in Melbourne for $800,000 with land value $400,000 and construction $300,000, how much stamp duty do I pay in 2026?
Using Victoria’s 2026 transfer duty rates on a dutiable value of $