When purchasing off-the-plan, it's not as straightforward as separating the land and the construction to determine each value as the total price is offered as a package, so a simple calculation is used.
While you might not have this information available before construction starts, all you need to do is take the cost of construction to build the property off of the total amount you pay to find the value that stamp duty is applicable on after the concession.
So, consider an example where you buy an off-the-plan home for $700,000, and the builders spend $600,000 of the total package price on building the home. After the first home buyer concession, the duty applies to the value of $100,000 ($700,000 minus $600,000) instead of the total $700,000 purchase price.
The savings are even more than they might initially seem. Stamp Duty payments are calculated by property price tiers, which means the more expensive the property is, the higher percentage of duty that buyers need to pay, as outlined in the table below.
So, as first-home buyers only pay stamp duty on the land and not the property, they'll often fall in a lower bracket and pay a smaller proportion. They save on not paying stamp duty on the new build and paying a smaller amount of duty on the land.