How will stamp duty changes in Victoria affect you?

Stamp duty is a substantial cost that can set property seekers back a great deal when combined with a home loan deposit and other fees involved in purchasing property. With the State Government announcing some huge changes to this tax, let’s look at how it will affect you as a first home buyer or investor.

How does stamp duty currently work in Victoria?

Stamp duty in Victoria works on a sliding scale. You can expect to pay $31,070 in stamp duty on a property worth $600,000, and $11,370 on a property worth $300,000, according to the State Revenue Office of Victoria.

Under existing legislation, first home buyers may be eligible for the First Home Owner Grant (FHOG). This enables you to receive a 50 per cent reduction in stamp duty if you meet eligibility requirements, which include living in the property continuously for 12 months and purchasing an existing/established home.

It’s good news for first home buyers in Victoria, as stamp duty is being abolished.

How will the stamp duty changes affect Melbourne’s first home buyers?

Stamp duty will be abolished for first home buyers buying property valued under $600,000. There will also be tiered reductions for first home buyers purchasing property valued between $600,000 and $750,000.

The abolition of such a large tax will significantly increase your borrowing power, enabling first home buyers to enter the housing market sooner, with Victorian Treasurer Tim Pallas telling ABC News he hopes it will help 25,000 Victorians purchase their first property.

How will the stamp duty changes affect Melbourne investors?

Stamp duty legislation changes will affect investors differently, and those looking to invest in Melbourne real estate will need to get in quickly to take advantage of the existing concessions that are available.

As of July 1, the off-the-plan stamp duty concession will no longer be available to investors. This means that in order to buy off-the-plan property without the weighty stamp duty fee on top, you’ll need to get in quick.

It’s important to stay informed of all changes by talking to a real estate agent who is up-to-date with the current situation. The team of property experts at Nelson Alexander know Melbourne real estate inside and out.

If you’d like to find out more about purchasing your first home or investment property in Melbourne and ensure you benefit from the upcoming changes to stamp duty legislation, speak to us today.