The Victorian Government of Australia has announced a significant reduction in stamp duty for off-the-plan property purchases, aiming to encourage more housing construction in the state.
New Measures to Enhance Affordability
The recent change will lower upfront costs, speed up building projects, and improve overall affordability for homebuyers. Premier Jacinta Allan introduced the one-year stimulus at a new apartment complex in North Fitzroy.
Under the current regulations, first-home buyers and owner-occupiers can receive a stamp duty concession for off-the-plan purchases. This allows construction costs to be deducted from the sale price for tax purposes. However, the existing benefit is limited to a post-deduction value of A$750,000 (approximately $501,157) for first-home buyers and A$550,000 for owner-occupiers.
Expanded Concession for All Buyers
The new policy aims to boost housing construction by extending the stamp duty concession to all buyers of apartments, units, or townhouses off-the-plan, removing the previous value limits. Effective from October 21 for a duration of 12 months, the policy allows a full deduction of remaining construction and refurbishment costs when calculating stamp duty liabilities.
The potential savings vary based on the construction stage. Generally, buyers of off-the-plan apartments could see their stamp duty reduced to about one-fourth of the original amount without the new concession. For instance, a Victorian purchasing a A$620,000 apartment before construction could see stamp duty costs drop from approximately A$32,000 to around A$4,000, resulting in savings of nearly A$28,000.
Benefits for Buyers and Builders
Allan stated, “More apartments and townhouses getting built means more homes for young people and families to rent or buy.” Victoria’s Treasurer Tim Pallas emphasized, “This will significantly reduce upfront costs—it’s a huge win for all buyers and builders.”
To qualify for the new concession, the property must be part of a strata subdivision, which includes shared areas like driveways and hallways. Non-strata properties, such as house and land packages, are not eligible for the new concession, although existing concessions for first-home buyers and owner-occupiers remain in effect.
Addressing Industry Concerns
This initiative addresses industry concerns regarding the impact of current interest rates on property sales and project launches. By lowering upfront costs for a wider range of buyers, developers can expect increased presale activity, enabling them to meet financing requirements more quickly and begin construction sooner.
The stamp duty concession is part of a broader government effort to increase the availability of social and affordable housing, as well as enhance infrastructure projects like the Suburban Rail Loop and its associated housing precincts.
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