What you need to know about Victoria’s stamp duty concessions for off-the-plan homes

The premier announced that there will be stamp duty concession on off-the-plan apartments, townhouses and units purchased in 2025

Homebuyers in Victoria will save tens of thousands of dollars in stamp duty when purchasing off-the-plan apartments, townhouses and units in the next 12 months, under a state government initiative aimed to make it easier to buy and build homes.

Prior to the announcement, first home buyers did not have to pay stamp duty on new or established properties valued at $600,000 or less, with a reduced rate charged for properties valued up to $750,000. Various duty exemptions are available for first home buyers, including specific exemptions based on property value and residency requirements. First home buyer duty reductions and exemptions provide significant financial benefits, such as full exemptions for properties under $600,000 and reduced rates for properties up to $750,000.

Stamp duty discounts were also available for non-first home buyer owner occupiers who bought a new or existing homes valued at up to $550,000.

In short, here is how the scheme will work:

• Stamp duty will be reduced for units, apartments and townhouses bought off-the-plan.
• The concession allows construction costs to be deducted from the sale price of the dwelling when calculating the stamp duty owed on the transaction. To calculate stamp duty, you need to determine the dutiable value by subtracting the construction costs from the sale price. This helps in reducing the overall stamp duty payable.
• A discount was already available for first home buyers and owner occupiers. However, for the next 12 months, this will be accessible to all buyers and to eligible dwellings at any price.

Who is eligible for this scheme?

To be eligible for the concession, apartments, townhouses and units must be in strata subdivision. This means dwellings must hold common property such as a driveway or a shared hallway. House and land packages or other dwellings that are not part of a strata subdivision are ineligible. However, existing concession on these properties will continue explained by the government. The home buyer duty reduction is another form of financial assistance available to eligible first-time home buyers purchasing properties before a certain date, with criteria including contract dates and property values.

The home buyer duty exemption offers potential financial benefits for first-time home buyers in Victoria. Eligibility criteria include specific contract date requirements, and the exemption can reduce or eliminate stamp duty costs associated with purchasing a home or vacant land.

Types of Stamp Duty Concessions

Stamp duty concessions are available to eligible home buyers in Victoria, providing relief from the financial burden of purchasing a property. There are several types of concessions available, each with its own set of eligibility criteria and benefits.

Home Buyer Duty Concession

The home buyer duty concession is a reduction in the amount of stamp duty payable on a property purchase. This concession is available to eligible home buyers who purchase a property as their principal place of residence. The concession is calculated based on the dutiable value of the property and can provide significant savings for home buyers.

First Home Owner Grant (FHOG)

The First Home Owner Grant (FHOG) is a grant provided by the Victorian Government to eligible first home buyers. The grant is $10,000 for newly constructed homes or buying an off the plan property. To be eligible for the FHOG, home buyers must meet certain criteria, including being a first home buyer, purchasing a property as their principal place of residence, and meeting the income and asset tests.

Calculating Stamp Duty

Calculating stamp duty can be complex, but it is essential to understand how it is calculated to ensure you are eligible for any concessions or exemptions.

Dutiable Value of the Property

The dutiable value of the property is the value of the property that is subject to stamp duty. This value is typically the contract price of the property, but it can be adjusted in certain circumstances, such as when the property is purchased off the plan.

Stamp Duty Rates in Victoria

Stamp duty rates in Victoria vary depending on the type of property being purchased and the dutiable value of the property. The rates are as follows:

It is essential to note that these rates are subject to change, and home buyers should check with the State Revenue Office for the most up-to-date information.

In addition to the stamp duty rates, there are also concessions and exemptions available to eligible home buyers. These concessions and exemptions can provide significant savings for home buyers and should be carefully considered when purchasing a property in Victoria.

What are the next steps for first home buyers in Victoria who want to purchase a property?

The Property Council and the Urban Development Institute of Australia responded to the announcement, respectively suggesting it as a “big step in the right direction” and a “good start”.

In efforts to provide Victorians with more affordable housing options, it is the second considerable policy measure introduced by the Allan government this week. Land transfer duty, which is applied in Victoria, has significant implications for property transfers and is calculated based on market value or transaction price.

To learn more information about the range of available concessions to home buyers and how they are calculated, book in a Discovery Call with one of Kaleido Loan’s expert mortgage brokers. When purchasing vacant land, there are specific stipulations, including the obligation to build and reside on the land within a designated time frame to maintain eligibility for various duty exemptions or concessions.

To read more about the Victorian Government’s scheme, visit www.sro.vic.gov.au/offtheplan