Housing affordability is a major political issue. To help more Victorian’s break into the housing market, the State Government has announced changes to the stamp duty regime. The changes apply to contracts of sale after 1 July 2017.
First Home Buyers
Under the proposed changes, first home buyers purchasing either new or existing properties with a purchase price of up to $600,000, will be exempt from stamp duty. First home buyers purchasing a property between $600,000 and $750,000 will receive a reduced concession. For example, on a house purchased for $375,000, a first home buyer would not have to pay the $7,560 in stamp duty normally assessed on this transaction.
To be eligible for the exemption or concession in stamp duty the following requirements must be met:
- a purchaser and his or her partner must qualify as first home buyers;
- a purchaser must be an Australian citizen or permanent resident, and
- a purchaser must use the property purchased as his or her principal place of residence for a continuous period of 12 months, commencing within 12 months of possession of the property.
First Home Owner Grant
The State Government intends to increase the First Home Owner Grant from $10,000 to $20,000 for new homes built in regional Victoria.
To be eligible for the First Home Owner Grant the following criteria must be met:
- a purchaser must intend to live in the home as their principal place of residence for at least 12 continuous months, commencing within 12 months of settlement or completion of construction;
- be aged 18 years or over;
- be an Australian citizen or permanent resident as at the day the purchaser is entitled to possession of the home under the contract or the date on which the building is ready for occupation as a place of residence;
- the purchaser must not have previously received a first home owner grant in Australia;
- the purchaser must not have owned a home in Australia, either jointly or separately prior to 1 July 2000, and
- the purchase must not have lived in a home in Australia that the purchaser owned or part-owed on or after 1 July 2000, for a continuous period of six months or more.
For the Grant to apply, the value of the property must be less than $750,000 and the property must be in regional Victoria.
Eligible first home owners of new homes in metropolitan Melbourne will continue to receive the $10,000 First Home Owners Grant.
Off the Plan Stamp Duty
Stamp duty concessions exist in Victoria now in relation to off the plan sales. The availability of the concession is to be limited after 1 July 2017 to properties to be used by the purchaser as their principal place of residence.
The stamp duty concession is available where the dutiable value of the property is less than $550,000.
Vacant Residential Property Tax (VTPT)
The VRPT will be levied on dwellings that are vacant for more than a total of 6 months in a calendar year. The aim of the VTPT is to encourage owners who unreasonably leave their properties vacant to instead make them available for either purchase or rent.
The VTPT is self-reporting. That is, owners of vacant residential property will be required to notify the State Revenue Office of any vacant properties that they own. Liability for the VTPT will be triggered on a calendar year basis (like land tax) and will be charged at a rate of 1 per cent of the property’s capital improved value. For example, the VTPT will be $5,000 for a property with a capital improved value of $500,000.
In recognition of the fact that there may be legitimate reasons for a property to be left vacant, there will be specific exemptions from the VTPT such as a holiday homes, a city unit for work purposes, deceased estates and homes owned by Victorians temporarily overseas.
For further information on stamp duty benefits, please contact us at firstname.lastname@example.org or on 5303 0281.
For more information on our conveyancing arm, click here.
The information on this website is of a general nature only. It is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice about your particular circumstances.
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