Increased stamp duty and land taxes were some of the key learnings from the 2021/2022 Victorian State Budget, which was announced by the Andrews Government on May 20, 2021. The Government announced an increase to stamp duty land tax with the hope of creating an even playing field between those wanting to buy their home and property investors seeking to profit from soaring property values, which has created waves in the property sector. With so much to take in, in this C&G Blog, we’ll highlight the main takeaways from the budget announcement so you know what to expect when the changes come into effect on July 1.
Stamp duty will increase 13% and land tax will increase 15%
While there is currently a stamp duty waiver in place for the stamp duty on residential properties valued up-to $1 million, this will end on July 30. After this, exactly how much stamp duty you will need to pay depends on where in Victoria your property is. The average house price in Melbourne is currently estimated to be $1 million, and $500,000 in regional Victoria. The new budget does include a stamp duty concession up-to $1 million for new residential properties in central Melbourne. This concession will end in the next financial year. There is also a concession available to people buying homes off the plan until June 2023 also up-to $1 million. For more information about buying off the plan read our blog here.
Stamp duty concessions for first home buyers will remain
First home buyers purchasing homes under $600,000 will continue to be fully exempt from paying stamp duty, while anyone purchasing a home up to $750,000 is able to claim a partial concession. The First Home Owner Grant also remains in place for those building new homes in Victoria, but from July 1 the grant amount for those building in regional Victoria will be reduced from $20, 000 to $10, 000. More information about the first home buyers grant is available here.
A premium stamp duty on property transactions above $2 million from July 1
One of the biggest increases is the stamp duty payable on properties valued above $2 million, which is now $110,000 plus 6.5% of the dutiable value in excess of $2 million. A new windfall gains tax will apply to properties where the value is boosted through rezoning by more than $100,000, with a 50 per cent tax on windfalls above $500,000. This will come into effect from July 2022.
For a full rundown of the budget, visit the Victorian State Government website here.
Keep in mind that land taxes generally don't apply if your property is your primary residence. C&G can answer any questions or concerns that you might have about the new budget. Contact us today!