On 5 March 2017, the State Government of Victoria announced the abolition of stamp duty for first home owners when purchasing a home under $600,000.00. This is part of the State Government’s initiative to tackle housing affordability and the changes are subject to passage of the State Taxation Amendment Bill 2017 (‘the Bill’) which is expected to provide as follows:
Stamp duty for first home buyers exemption and concession
- The purchaser and the purchaser’s partner must be first home buyers.
- The purchaser must be an Australian Citizen or permanent resident (or a New Zealander holding a special category visa and in Australia at the time of settlement).
- The purchased property must be used as the purchaser’s principal place of residence.
- The exemption and concession will apply to contracts signed from 1 July 2017.
- A stamp duty exemption will apply if the home has a dutiable value of less than $600,000.00 while a sliding scale stamp duty concession will apply to homes between $600,000.00 and $750,000.00.
Off-the-plan stamp duty concessions
- For contracts entered into from 1 July 2017, off-the-plan stamp duty concessions will only be available for purchasers who qualify for principal place of residence stamp duty concession or first home buyer stamp duty concession/exemption. Therefore the concession will not apply for:
- commercial property; or
- residential investment property.
Vacant residential property tax
- From 1 January 2018 a vacant residential property tax will apply to properties in Melbourne’s inner and middle suburbs, which are vacant for more than six months of the calendar year.
- The tax of 1% of the capital improved value of the property is payable on a self-reporting basis. The State Revenue Office will undertake monitoring and compliance activities.
- A list of exemptions is being compiled and is expected to include: holiday homes, city units necessary for work purposes, deceased estates and homes owned by Victorians who are temporarily overseas.
For further information please contact: