An exemption from duty may be available for a declaration of trust that establishes a special disability trust or a transfer of a home to the trustee of the special disability trust. Different rules apply for declarations of trust or transfers completed before 1 July 2023.
For declarations of trust or transfers after 1 July 2023, an exemption is available if:
- the person declaring the special disability trust, or the transferor of the home, is an immediate family member of the principal beneficiary of the special disability trust
- there is no consideration provided for the declaration or transfer (i.e. the home is gifted)
- the dutiable value of the home is:
- for a home that the principal beneficiary intends to use as principal place of residence (PPR home), $1.5 million or less, or
- for any other property (non-PPR home), $500,000 or less.
If the dutiable value of the home exceeds the relevant threshold, duty will only be assessed on the value of the home that exceeds the threshold.
For a PPR home, the principal beneficiary must satisfy a residence requirement.
What is a special disability trust?
A special disability trust allows immediate family members to plan for the current and future needs of a person with a severe disability. Special disability trusts are regulated under the Social Securities Act 1991 and must meet a range of requirements including beneficiary requirements, trust purpose requirements, trustee requirements, trust property requirements, trust expenditure requirements and reporting requirements.
Under the beneficiary requirements, the trust can only have one beneficiary who must meet requisite impairment and disability conditions. This beneficiary is referred to as the principal beneficiary.
Who is a principal beneficiary?
To be eligible to be a principal beneficiary, the person with a disability must, if aged 16 or over:
- have an impairment that would qualify them for the disability support pension, or similar invalidity or permanent incapacity payments;
- require certain full time care, and
- not be able to work more than 7 hours a week for a wage that is at or above the minimum wage, or outside the supported wage system, due to a disability.
If a principal beneficiary is aged under 16, different requirements apply include that they must have a severe disability or severe medical condition, supported by evidence from a treating health professional.
Services Australia or the Department of Veterans’ Affairs determine whether the individual would be eligible for a special disability trust.
Who is an immediate family member?
An immediate family member includes a parent, legal guardian, grandparent or sibling of the principal beneficiary.
Who must live in the property?
For a declaration of trust or transfer of a PPR home, the property must be used as a principal place of residence by the principal beneficiary.
The principal beneficiary must move into the property within 12 months of the declaration or settlement and live there for 12 consecutive months as their principal place of residence.
If a change in circumstances means the residence requirement may not be satisfied, you must notify us in writing within 30 days of becoming aware of those circumstances. In limited circumstances, we may vary the residence requirement.
If the residence requirement is not met, the declaration of trust or transfer will be reassessed against the non-PPR dutiable value threshold (i.e. $500,000), subject to any other exemption or concession applying).
For a declaration of trust or transfer of a non-PPR home, the principal beneficiary is not required to live in the property.
Does the exemption apply to vacant land or off-the-plan properties?
No. This exemption does not apply to vacant land transfers or partially completed homes. At the time of the settlement or declaration of trust, there must be a building affixed to the land that in the Commissioner’s opinion is designed and constructed primarily for residential purposes and may lawfully be used as a place of residence.
