The Victorian Government 2020/21 budget released on 24 November 2020 revealed that Victoria will offer major stamp duty discounts as a means to stimulate the property market.
The Government will waive a percentage of stamp duty for residential properties valued up to $1 million as follows:
- 50 per cent waiver on purchases of newly built or off-the-plan residential properties; and
- 25 per cent waiver on existing residential properties.
The waiver applies to contracts entered into on or after 25 November 2020 and before 1 July 2021.
The increase in the threshold of the value of residential properties to $1 million (instead of the previous $750,000 threshold) will mean that more people will be eligible for stamp duty discounts. Together with other subsidies announced in the budget, the government hopes this will fast-track Victorians into home ownership and stimulate the property market.
The change also reflects a saving of up to $27,500 for buyers of a new home, and a saving of up to $13,700 on the purchase of an established home.
The 50 per cent stamp duty concession for commercial and industrial properties in regional Victoria has also been brought forward to January 2021 to support business to open, relocate or expand.
The Government has also extended the $20,000 First Home Owner Grant (Grant) for those buying or building a new home in regional Victoria. This Grant will continue to apply to contracts signed up to 30 June 2021.
Victoria’s stamp duty reforms follow suit after the NSW Government’s budget revealed a possible phase out of stamp duty and shift towards a new land tax instead.
In line with its aim to increase housing supply for renters, the Government will also support the build-to-rent sector by offering a 50% land tax discount for eligible build-to-rent developments, including an exemption from the absentee owner surcharge, until 2040. These tax changes will make the new social housing projects more viable. For more information about the funding commitment to social housing, read our previous article here.
To find out more about the recent stamp duty discount and other property concessions, contact our property team.
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