Abolishing stamp duty for properties valued below $600,000 and concession for properties valued between $600,000 to $750,000
“These changes will help thousands of Victorians make the Great Australian Dream a reality.” Premier Daniel Andrews
We provided a summarised takeaway of the recently announced plan by the Andrews Government to help first home buyers get into the property market. The below shows key points related to the announcement.
- Commencing 01-Jul-17
- No stamp duty for properties valued below $600,000
- Sliding scale concession for properties valued between $600,000 and $750,000
- Off-the-plan stamp duty concession only available for owners living in the properties or who are eligible for the first home buyer stamp duty concession
- Introduction of a Vacant Residential Property Tax (VRPT)
Aside to the scrapping of stamp duty and concessional rates for the higher valued properties, there was a mention of the Vacant Residential Property Tax (VRPT).
WHAT: VRPT is designed with a core objective in mind; that is to increase housing supply in the current market through current housing stock.
HOW: The approach is to levy a tax on property owners who leave their properties empty.
WHEN: Consultant during transition period with commencement of the tax from 01-Jan-18.
COST: 1% of capital improved value of the property (this can be found in your council rates or call your council to check).
WHERE: VRPT is applicable to inner and middle areas of Melbourne where housing affordability is most pressing.
What remains to be seen is the definition of “practical exemptions”; will it cover owners who are temporary working overseas, or holiday homes or what is the duration of vacant period under exemptions etc. Another interesting point is that the triggering of the tax lies with the property owners to inform State Revenue Office; meaning if property owners were to leave their property vacant for extended period of time (as per VRPT’s definition), then the property owners must declare to SRO and be liable for the 1% tax. SRO will also be responsible for the enforcement of the tax.