First Home Stamp Duty Package A Major Step Forward For Victoria

The Victorian Government announced over the weekend that stamp duty will be abolished for first home buyers for purchases below $600,000.

Those buying a home valued between $600,000 and $750,000 will also be eligible for a concession, applied on a sliding scale.

The exemption and concession will apply to both new and established homes, in a move that is expected to help 25,000 Victorians find their first home.

“These changes will help thousands of Victorians make the Great Australian Dream a reality," Premier Daniel Andrews said.

“With negative gearing and capital gains tax concessions, the odds are already stacked against first home buyers. This will help level the playing field.”

The Government also said they will remove off-the-plan stamp duty concessions on investment properties to help tilt the scales further back towards home owners.

The off-the-plan stamp duty concession will now be available solely for those who intend to live in the property or who are eligible for the first home buyer stamp duty concession.

At the same time, a Vacant Residential Property Tax will address the number of properties being left empty across inner and middle suburbs of Melbourne.

Under the changes, owners who unreasonably leave these properties vacant will instead be encouraged to make them available for either purchase or rent.

The Vacant Residential Property Tax will be levied at 1 per cent, multiplied by the capital improved value of the taxable property. For example, if the property has a capital improved value of $500,000, the amount paid will be $5,000.

There will be a number of exemptions, recognising there are some legitimate reasons for a property being left vacant, including holiday homes, deceased estates and homes owned by Victorians who are temporarily overseas.

Treasurer Tim Pallas said the stamp duty abolishment was made a reality to make it easier for first home buyers to get their foot in the door.”

“These initiatives are important steps towards ensuring today’s families and future generations will be able to afford somewhere to live," he said.

According to The Age, Melbourne's median house price of $795,447 means people will still argue that home ownership will remain out of reach for the majority of people, unless property prices are driven down or initiatives such as inclusionary zoning are introduced that would force developers to ensure that a proportion of new dwellings are affordable or low-cost.