VICTORIA’S STAMP DUTY CHANGES: WHAT BUYERS NEED TO KNOW Source: https://www.realestate.com.au/, , Eleanor Creagh, First published 25th November, 2024 Beginning in October, stamp duty has been significantly reduced for all off-the-plan apartments, units and townhouses in Victoria. This Victorian government initiative aims to spur development in a bid to ease chronic housing supply shortages. Before, first-home buyers and owner-occupiers could benefit from a stamp duty concession on off-the-plan purchases, which permitted the deduction of construction costs from the sale price for the purpose of calculating the stamp duty owed. Previously, the stamp duty concession for off-the-plan purchases was limited to first-home buyers and owner-occupiers: to qualify, the value calculated for stamp duty purposes, after construction costs were subtracted, had to fall below $750,000 for first-home buyers and $550,000 for owner-occupiers. If these thresholds were exceeded, the concession was not applicable. Under the new changes, the concession has been expanded to include anyone purchasing an off-the-plan apartment, unit, or townhouse, regardless of their buyer status, so it now includes investors. Moreover, the value thresholds have been eliminated, making the concession available for properties at any price point. The 12-month extended concession, which began at the end of October, permits a full 100% deduction of remaining construction and refurbishment costs in calculating the stamp duty due. This means that, for developments not yet under construction at the time of purchase, stamp duty will be calculated based only on the land value, rather than the total price of the property. The savings are considerable: a Victorian taking advantage of this concession could save approximately $28,000 on stamp duties for a $620,000 apartment if purchased off-the-plan before construction begins — reducing the duty from about $32,000 to roughly $4,000. Stamp duty concessions reduce the upfront costs for buyers, and these changes may mean some buyers are able to purchase sooner than they otherwise would have, of particular importance with housing affordability at its lowest level in three decades. With the state having ambitious targets to meet in the completion of new homes, the move is a welcome step toward stimulating demand for new construction and being able to build more new homes. The choice to focus on apartments, rather than houses, coincides with a period where the number of high-density homes planned for development has dropped to historic low levels on a per Opening Lines 5 BUSINESS VIEW OCEANIA VOLUME 06, ISSUE 11
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