Recent changes to stamp duty taxes have been dominating property news in the last few weeks. The new amendments could mean considerable savings for some buyers and will have consequences for investors as well. Victoria, on average, offers greater stamp duty savings than any other state. With the new changes, new buyers can save thousands of dollars which can be better spent on furniture packages and other essentials which in turn can make the thought of entering the property market less daunting. Our stamp duty summary is a quick guide for anyone considering buying a new home.
On July 1st 2017, new taxation rules will apply for homes purchased in Victoria. These will mean significant savings for first home buyers as stamp duty will be abolished on purchases under $600,000 for others, there are still savings to be made in the next month.
Purchasing a new home valued at $600,000 or less? If you are purchasing a new residence and this is your first home you are no longer liable to pay stamp duty. Buy a property for $600,000 and you will save around $15,000 (conditions apply).
You are still also eligible for the first home owner's grant of $10,000. The exemption applies to new and established homes.
Your new home has to be your primary place of residence (where you live), for at least 12 continuous months from the date of settlement or the date you commence legal ownership.
For Properties Valued Higher?
First home purchases ranging between $600,000 and $750,000 will get a concession applied on a sliding scale.
Off-the-plan stamp duty concessions will only apply to buyers who intend to live in the property they purchase. Investors will need to buy before July 1st 2017 to avoid new stamp duty charges. Simply put, first time or seasoned investors will soon pay full stamp duty on a new property that can mean roughly, an additional $15,000 - $20,000 in fees.
Investors can still save on stamp duty tax for off-the-plan properties where concessions currently apply. The amount saved is still dependent on whether you purchase before construction, once construction has started or at completion. These current concessions however, will not apply for much longer.
Investors need to make most of Victoria's current stamp duty savings before July 1st 2017 when they will no longer be eligible for stamp duty savings. Timing has never been more important.
*Source: State Revenue Office Victoria, State Revenue Office Queensland, State Revenue
Office NSW. Figures based on purchasing a $500,000 off the plan apartment in 2015.