The Victorian State Government announced a reduction in registration tax for project houses

MAP: Homebuyers in the State of Victoria will save tens of thousands of dollars in stamp duty when buying apartments, townhouses, etc. in the next 12 months, based on the State government’s proposal to stimulate housing development.

On October 21, Prime Minister Jacinta Allan issued a notice on regulations to reduce registration tax for project houses. This policy takes effect immediately and applies to all home buyers.

Increasing interest rates have caused the real estate market to slow down over the past year, especially for new projects, implementing tax reduction policies will help developers quickly start the construction process and create favorable conditions for home buyers.

“Victorians have more opportunities to choose the right place to live.”

Prior to the announcement, first-time home buyers did not have to pay stamp duty on new or used properties valued at or below A$600,000, with the current tax relief being applicable to properties valued up to $750,000.

The stamp duty reduction policy also applies to non-first-time home buyers who own new or existing real estate worth up to $550,000.

The government said that under the new policy, the amount of stamp duty will be calculated based on the pre-construction land value, not the total value of the completed property. For example, for an apartment worth $620,000, the registration tax is reduced to $4000 – a savings of $28,000.

Finance Minister Tim Pallas said the policy would cost the government about $55 million over 12 months. However, this is considered a short-term intervention to warm up the market during the current difficult time.

He expects raw material costs and interest rates to “decline slightly” within the next year. Because the state’s tax policy is a huge source of revenue, accounting for one-third, of which “stamp tax brings in 8 billion dollars each year.”

To qualify for incentives, apartments, townhouses, etc. must belong to the real estate line managed by Strata.

House and land packages or other types not managed by Strata are considered ineligible.

According to a National Assembly investigation last year, the registration tax was “ineffective and inequitable” but difficult to completely abolish. The inquiry called for national reforms to stamp duty to “address its negative impact on affordability.” buy homes for Australians.”

This is also the view of Jonathan O’Brien from Yimby Melbourne, who supports the Victorian Government’s policy but calls for intervention from the Federal Government.

“It is time for the Albanese Government to act and support Victoria in eliminating stamp duty altogether, replacing it with a comprehensive land tax.”

The Real Estate Council and the Urban Development Institute of Australia also supported the announcement, calling it “the start of a big step forward.”

On Sunday, the Government announced plans to take planning control in 50 areas in central Melbourne adjacent to public transport, including wealthy Liberal-held areas such as Brighton, Hawthorn and Malvern.

Article source: The Guardian, 2024. Victoria rolls out stamp duty concessions for off-the-plan homes in bid to boost housing development

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