According to various media reports, the Victorian Government has announced changes to stamp duty attached to buying property today. Currently, first time buyers in Victoria get a 50 per cent stamp duty discount, but from July, the duty will be removed for first-home buyers in the state where the property costs less than $600,000. In a band between $600,000 and $750,000 there will be stamp duty reductions regardless of whether the property is new or existing. It will assist owner occupied buyers.
Around 25,000 people a year are expected to benefit from the changes with average first-home buyer saving an extra $8,000. Those buying close to the tax limit of $650,000 would be $11,000 better off.
In the financial year 2013-14, the Victorian Government received $3.5 billion in duty, now it stands at $5.7 billion. The changes would cost about $800 million over four years.
Also, a $50 million “HomesVic” program will begin in January 2018 to give about 400 buyers an option to co-purchase a home with the government in an equity share. Buyers will need a 5 per cent deposit to be eligible, and equity up to 25 per cent for each property which the government will recover when the property is sold, The scheme will target couples earning up to $95,000 and singles earning up to $75,000.
Additional measures include a 1% land tax on vacant property and removal of some investment property stamp duty incentives.
These measures add to the to the land release and country first owner grants already announced. Combined they could make quite a difference to the market.
