Victorian Government Announces Tax Reductions

by | Dec 4, 2020 | Conveyancing & Property

Last week the Victorian Government announced temporary stamp duty reductions and other financial incentives in an attempt to rebuild Victoria’s property market after a horror year for the economy due to the COVID-19 pandemic and bushfires.

Stamp Duty

Victorians who enter into a Contract of Sale before 1 July 2021 for the purchase of a home valued up to $1million will receive substantial discounts on stamp duty.  This is an increase from the previous threshold of $750,000, so more buyers will be eligible for savings.

Those purchasing a new home may be entitled to a 50 percent discount on their normal stamp duty bill and for those purchasing an existing home, a 25 percent discount is available.

Homebuyer Fund

The Victorian Government has also announced that it will launch a $500million Victorian Homebuyer Fund which will help facilitate access to the property market by those who wish to purchase a home but do not have a 20 percent deposit (equity normally required by financiers).  The fund will work by contributing to the purchase price in exchange for a proportionate equity interest in the property.

First Home Owner Grant

The First Home Owner Grant of $20,000 has been extended for those entering into a Contract of Sale before 1 July 2021 for the building of or purchase a new home in regional Victoria.

Future Plans

The State Government has also flagged future land tax relief which will see a reduction by 50 per cent from 2022 to attract investment in build-to-rent developments.

The government has also indicated it is likely to from July 2023 to provide a 50 percent stamp duty concession on commercial and industrial properties in an effort to support businesses to expand.

Should you have any queries about stamp duty, land tax or any other property matters, our property team is able to assist you and can be contacted on 03 9614 7111 or melbourne@nevettford.com.au.