Deferred duty

If you and your home are eligible, you can choose to defer payment of conveyance duty on your purchase of the home.

Barrier Free model

The ACT Government introduced the Barrier Free model for duty as part of its tax reform on 18 September 2017.

When registering the title to your new home at Access Canberra (after settlement), you should tick the ‘Deferred duty application’ box on your transfer form.

The eligibility requirements of the Scheme have not changed.

Eligibility

An eligible person for deferred duty is someone’s who eligible for either the First Home Owner Grant (FHOG) or the Home Buyer Concession Scheme (HBCS). An eligible property is one that has a price at or below the relevant HBCS property threshold.

To be eligible for the deferred duty scheme:

Your home is eligible for deferred duty whether it’s new, substantially renovated or established, as long as you meet the appropriate requirements.

If you’re an eligible home buyer and your duty amount has been reduced under the HBCS, as long as the remaining duty is at least $1,000, you can defer paying that duty under the deferred duty scheme.

If we approve you for deferred duty, you must satisfy the residency requirements of the FHOG or HBCS. At least one transferee must occupy the home as their principal residence for a continuous period of 12 months, starting within one year of completion of the eligible transaction or issue of the Certificate of Occupancy.

If you have any questions concerning your eligibility contact us.

Payment of duty

If we approve your application for deferred duty, you have two payment options:

  1. You can start payment instalments immediately – that is, within 90 days, or within one year for an off-the-plan purchase, from the date of the eligible transaction – to repay the total duty plus interest within 10 years. You can also make a voluntary repayment over and above your instalment amount at any time.
  2. You can defer making payments for up to five years from the date of the eligible transaction. However, you can still make a voluntary repayment exceeding your instalment amount at any time. You must then pay the duty in full within the next five years so that you repay all of it, plus interest, no later than 10 years after the transaction date.

With a deferred duty payment arrangement, you need to pay the duty and any interest before the property title can transfer to a new owner.

You must pay the minimum duty instalment on or before the day the payment is due. If you don’t, it’s a tax default. As a result, you will immediately owe the full amount of deferred duty and any interest accrued. When a tax default occurs, an interest rate of 8 per cent per year, in addition to the market interest rate, applies to the outstanding deferred duty amount. A penalty tax may also apply under certain circumstances. The Commissioner for ACT Revenue may also attempt to recover any overdue amount.

If we approve you for deferred duty, you must pay it and any interest by direct debit. You need to provide our office with a completed Direct Debit Request form within 14 days before the first instalment's due date.

Thresholds

To be eligible for deferred duty, your home’s value must be at or below the HBCS upper property value threshold as shown in Table 1 below.

Table 1 – Deferred duty thresholds

Date range

HBCS upper property value threshold

7 June 2017 to 30 June 2018

$607,000

1 January 2017 to 6 June 2017

$590,000

8 June 2016 to 31 December 2016

$585,000

1 January 2016 to 7 June 2016

$562,000

Payment of duty

After your property is registered at Access Canberra, you have two payment options:

  1. You can start payment instalments immediately – that is, within 14 days after registration of your title – to repay the total duty plus interest within 10 years. You can also make a voluntary repayment over and above your instalment amount at any time.
  2. You can defer making payments for up to five years from the date of the eligible transaction. However, you can still make a voluntary repayment exceeding your instalment amount at any time. You must then pay the duty in full within the next five years so that you repay all of it, plus interest, no later than 10 years after the transaction date.

With a deferred duty payment arrangement, you need to pay the duty and any interest before the property title can transfer to a new owner.

You must pay the minimum duty instalment on or before the day the payment is due. If you don’t, it’s a tax default. As a result, you will immediately owe the full amount of deferred duty and any interest accrued. When a tax default occurs, an interest rate of 8 per cent per year, in addition to the market interest rate, applies to the outstanding deferred duty amount. Penalty tax may also apply under certain circumstances. We may also attempt to recover any overdue amount.

If we approve you for deferred duty, you must pay it and any interest by direct debit. You need to provide our office with a completed Direct Debit Request form within 14 days before the first instalment’s due date.

Interest charges

Interest accrues on the deferred duty from the date the duty becomes payable until you pay it in full. Simple interest, which is calculated daily, accrues on the principal balance of the deferred duty – not on any accrued interest.

How to claim – transactions from 18 September 2017

If you are considering the deferred duty scheme, it is helpful to seek independent legal and financial advice before claiming.

From 18 September 2017, you need to self-assess your eligibility for deferred duty by referring to the eligibility criteria of the FHOG or the HBCS.

If you’re eligible, you can claim deferred duty by ticking the ‘Deferred duty application’ box on the transfer instrument that you lodge for registration at Access Canberra.

What happens next?

When you claim deferred duty on a transfer, we’ll issue you a letter with information about your duty deferral arrangement and explain how to make repayments.

If you’ve also claimed the HBCS, the amount of duty you pay will be reduced.

After you’ve received your assessment, we may contact you to verify your eligibility for the concession.

How to claim – transactions before 18 September 2017

If the conveyance process of your transaction was commenced before 18 September 2017 and you have yet to apply for deferred duty, please visit our Transactions before 18 September 2017 page for more information on lodging your application.