Vic Stamp Duty Changes Drive Up Enquiries

The Victorian Government appears to be on a winner with its stamp duty changes as the sector reacts positively—and one agent reports enquiries doubling on the news.

Property agency Marshall White director Leonard Teplin said inquiries had increased remarkably on the news of the scheme extension.

“After yesterday’s announcement by the Government, we received double the amount of enquiry we normally do from active buyers wanting to cherrypick the best apartments and townhouses available for sale,” Teplin said. 

Teplin said the announcement had had a greater impact than other incentives. 

“There is now a massive incentive beyond the design, guarantees and future proofing,” Teplin said.

“We expect that this week we will see more people and more activity than we saw for the month of September.” 

The Property Council of Australia Victorian executive director Cath Evans said that it would create confidence within the industry and with homebuyers. 

“Off-the-plan concessions for all purchasers will help bring back new buyers to this important part of the housing market,” Evans said. 

“Increasing off-the-plan purchases has been proven to support the feasibility of new housing projects, which in turn unlocks further development. 

“We welcome the application of these concessions to the townhouse market too, which operates across all parts of the state.”

▲ Marshall White director Leonard Teplin says the stamp duty changes have already increased buyer interest.

Evans noted that the work starting on apartments in Melbourne had slowed recently, referring to a report by Charter Keck Cramer. 

“Apartment and unit developers have been hit hard in recent years by a combination of factors,” Evans said. 

“Current analysis of the build-to-sell apartment market by Charter Keck Cramer shows apartment commencements in Melbourne have declined to less than 4000 a year.”

The PCA wants the stamp duty concessions to be monitored over the next 12 months and potentially extended beyond that timeframe.

“We have long advocated for positive changes in taxation policy to stimulate the construction of new homes,” Evans said.

“If this policy directly translates to housing supply, we strongly believe it should continue beyond this initial 12-month period.”

▲ Property Council of Australia’s Victorian executive director, Cath Evans, says the stamp duty concession should be monitored and potentially extended.

The Housing Industry Association Victorian executive director Keith Ryan said it was necessary to scrap stamp duty. 

“Stamp duty is an inefficient and ineffective tax that drives up the cost of housing, and a reduction in this burden is a step in the right direction to boost housing supply,” Ryan said.

Ryan also noted the announcement of 25 activity centres around train stations. 

“Expanding these activity centres to more areas will make it easier for developers to identify suitable locations for projects and plan out approaches to precinct designs closer to consumers’ existing homes, workplaces and family members,” Ryan said. 

“Last year the Victorian Government released its Housing Statement with a target of building 800,000 homes in 10 years. 

“To achieve this target all types of housing are needed including medium-density and greenfield housing.”

Ryan also said more work was needed to increase housing supply. 

“The industry continues to face a number of significant challenges in boosting housing supply,” Ryan said. 

“This includes the costs and time associated with delivering the key ‘last mile’ enabling infrastructure to get projects shovel-ready faster, the continuing raft of cascading regulatory changes, outdated home building contract laws and increasing costs and decreasing availability of insurance.

“Further targeted reforms are needed to ensure builders can deliver these much-needed homes for Victorians.”

The Victorian Government has now added an overhaul of the infrastructure contribution scheme to its plans to increase housing in the state. 

A planning scheme amendment has now been filed for such precincts as Macaulay and Arden that would reduce how much developers pay in those contributions.

The City of Melbourne has been waiting several years for the planning scheme amendment to be moved through the Victorian Department of Transport and Planning’s processes with public exhibition finally happening in August.

▲ The Victorian Government wants to reform the contributions scheme but planning scheme amendments to change contributions are already under way.

However, the recent announcement creates a working group of key property stakeholders and the Government to reform the current contributions scheme.

The working group, the Housing Affordability Partnership, will include the Property Council of Australia, the Urban Development Institute of Australia, the Housing Industry Association, Master Builders Victoria and developer Assemble.

The Victorian Government wants infrastructure contributions from every development project in the state. 

As reported in other media, the property industry wants a guarantee that the money will be used for community services and not placed in consolidated revenue. 

This latest announcement is for the trial of a contributions program from January 1, 2027 across the 10 activity centres. They are Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood. Contributions will be required for all new builds within 800m of the commercial core of each centre. 

It is expected to raise tens of millions of dollars and be allocated to schools, parks and transport in the area.

The working group is due to meet in November and report back to the State Government by March of next year with a reform proposal. The state said the industry had indicated it did not want a reformed scheme introduced immediately. 

Developers also make growth area infrastructure contributions (GAIC) for land at Cardinia, Casey, Hume, Melton, Mitchell, Whittlesea and Wyndham. Contributions revenue is expected to hit $336 million this financial year, according to reports.