First Home Buyer stamp duty concessions
& imminent termination of stamp duty concessions for investors.

In an effort to make home ownership more affordable for those entering the housing market, the Government is set to overhaul the way stamp duty is calculated in Victoria.

From 1 July 2017, First Home Buyers will be exempt from paying stamp duty on property purchases up to $600,000 and will get further concessions of purchases between $600,000 and $750,000.

To help fund this scheme, investors purchasing off the plan will have their stamp duty concessions terminated and will pay stamp duty on the full contract price.

It is the author’s view that this reform will not result in more affordable housing and will in fact further stimulate the property market driving prices higher.

This overhaul will drive investors to make their upcoming off the plan purchases prior to 01/07/17, placing pressure on the entry level stock sought by the First Home Buyers, This increased activity will drive prices and is likely to negate any relief offered to First Home Buyers from the stamp duty reform.

For example, a First Home Buyer purchasing a property off the plan for $600,000 with a land value of $200,000 will pay only $3,185 in stamp duty, the way stamp duty is calculated today. Under the new scheme the First Home Buyer will pay $0 stamp duty.

However, given the increased activity over the next few months, property values will go up far more than the amount of the perceived savings.

To find out how this reform affects your personal situation, ENQUIRE TODAY!

David Brewster
OIEC/Managing Director BPD