What has changed?
- First home buyers will pay no stamp duty on properties valued below $600,000 that they intend to use as their principal place of residence. As an example, first time buyers could save as much as $15,535 in stamp duty on a property valued up to $600,000.
- First home buyers will pay reduced stamp duty on properties valued between $600,000 and $750,000 that they intend to use as their principal place of residence.
- First home buyers may be eligible for a grant of $20,000 to buy their principal place of residence in regional Victoria for homes valued up to $750,000. Regional Victoria is areas outside metropolitan Melbourne (a list of the regional councils where this applies is linked here: https://www.sro.vic.gov.au/regionalFAQs).
- Investors lose their off the plan stamp duty concessions and these concessions are now only available to buyers who intend to use the property as their principal place of residence.
- Owners of vacant properties will be levied with a Vacant Residential Property Tax of 1% of the capital improved value of the property.
When do the changes take effect
All these changes will apply from 1 July 2017.
Why have the changes been made?
The Victorian government intend to make entry into the property market more affordable for first home buyers and to make buying property in regional Victoria more attractive for first home buyers. In announcing the new measures Premier Daniel Andrews proclaimed that “these changes will help thousands of Victorians make the great Australian dream a reality”.
The changes affecting investors and owners of vacant properties are a response to the perceived oversupply of apartments in some areas in Melbourne, many of which are reported as being vacant. The rationale behind it is to encourage owners of such properties to make them available for rent or purchase. The scheme does, however, make provision for a number of exemptions, namely holiday homes, deceased estates or temporary overseas owners.