Massive stamp duty changes:
Important breaking news for property buyers
The Victorian Government has announced today, in the 2017-2018 State Budget, that from 1 July 2017:
- Stamp duty will not apply to any property purchased by a first home buyer for under $600,000.
- A discounted rate of stamp duty will apply, on a sliding scale, to any property purchased by a first home buyer for between $600,001 and $750,000.
- The stamp duty concession for investors buying off-the-plan properties will be scrapped - only first home buyers and owner-occupiers will be eligible for a discounted rate of stamp duty.
- A Vacant Residential Property Tax will be introduced, aimed at stopping properties being left “unreasonably vacant”.
- Spouses wishing to transfer ownership of investment property between them will no longer be exempt from stamp duty, effective from 1 July 2017.
Here is the latest official advice from the State Revenue Office.
Property buyers, what you need to know:
If you are considering purchasing an off-the-property property as an investment, you must sign a contract by 30 June 2017 in order to be eligible for a stamp duty discount. It’s the date you sign a contract that matters, not the settlement date.
If you are considering transferring ownership of an investment property to your partner (“spousal transfer”), this must occur by 30 June 2017 to avoid stamp duty. Capital gains tax may still apply (speak to your accountant).
If you are a first home buyer, no stamp duty will be applicable for purchases of up to $600,000 from 1 July 2017, and there will be a discount on a sliding scale up to $750,000. You must move into the property within twelve months of purchasing. Remember: the demand for properties in the $500,000-$750,000 price range is expected to grow significantly after 1 July, which could inflate property prices well beyond any savings in stamp duty, so it may be better to buy before 1 July. It’s the date you sign a contract that matters, not the settlement date.
Please do not sign any contract without obtaining legal advice first.