Biggest changes to stamp duty in 10 years-$0 for first home buyers/ the end of concessions for buying off-the-plan!
No More Stamp Duty for First Home Buyer
Good news for first home buyers! The Victoria State Government has announced that from 1 July 2017 stamp duty will be abolished for new and existing properties under $600,000 and for those first home buyers purchasing a property between $600,000 and $750,000 a concession or discount will apply (SRO 2017). What does this mean for first home buyers? This will save first home buyers an average of around $8,185 for a home valued at $400,000, $15,535 for homes valued at $600,000 and $12,357 for a home valued at $700,000, plus it will help buyers contribute more towards the equity of their home and reduce their mortgage payments.
What is the criteria? The home must have a dutiable amount of less than $600,000 to receive the stamp duty exemption and a dutiable amount between $600,000 and $750,000 for the concession to apply. The dutiable amount referring to the greater of the purchase price or market value, minus any deductions, such as deductions for an off- the- plan purchase (SRO 2017). Additionally criteria must be consistent with the definition under the First Home Owners Grant Act 2000, where the purchaser and the purchaser’s partner must both be first home buyers. The purchaser must also be an Australian citizen or permanent resident and the purchaser’s property must be used as the purchaser’s principal place of residence for a continuous period of 12 months.
End of Concession for Buying Off-the-Plan
In addition from 1 July 2017, the off the plan stamp duty concession will only be available for those who qualify for principal place of residence stamp duty concession/ exemption (available for purchases with a dutiable value of up to $550,000) or the first home buyer stamp duty exemption/ concession. The concession will no longer be available for other purchases, such as residential investment properties and commercial properties (SRO 2017).
Increase to First Home Owners Grant
Furthermore for first home buyer considering purchasing a newly built property in regional Victoria, for contracts signed from 1 of July 2017 to 30 June 2020, the First Home Owners Grant in regional Victoria will double from $10,000 to $20,000! (SRO 2017) This only applies for new homes built in regional Victoria and valued up to $750,000. Visit here for a list of regional councils where first home buyers will qualify for the $20,000 FHOG http://www.sro.vic.gov.au/fhogchanges
Eligible first- home buyers of new homes in metropolitan Melbourne will continue to receive the $10,000 FHOG.
These new reforms are a great outcome for first time buyers and increases their capacity to purchase their first home and gives owner occupiers an advantage against investors. Additionally it will help Victorians break into the expensive housing market and under these new plans make housing more affordable.
For first home buyers purchasing property, contact the State Revenue Office for more information on applying for the concession and exemptions and to find out more about First Home Owner Grant.
Source and more information available here:
http://www.vic.gov.au/affordablehousing/buying-a-house-in-victoria/re-balancing-the-market.html for OTP stamp duty savings
http://www.sro.vic.gov.au/fhogchanges for FHOG increases to $20,000 for buyers in regional Victoria
http://www.vic.gov.au/affordablehousing/buying-a-house-in-victoria/abolishing-stamp-duty.html for more information on no more stamp duty for First Home Buyers