There’s only about three months left until the Victoria government plans to change the Stamp Duty Concessions which will affect both first home buyers and investors, but what does it really mean for first home buyers?
The Victoria Government has proposed changes to the current stamp duty charges, which is to take effect from 1 July 2017
. The end goal of this change is to help ease housing affordability for first home buyers, who are finding it increasingly more difficult to get a foothold on the property ladder.
According to CoreLogic, the median dwelling price in Melbourne now sits at $605,000 as at 31 March 2017, and has increased by 1.9 per cent over the month, 4.2 per cent over the quarter and 15.9 per cent YoY. The average Melbourne house now sits around $677,000, whilst apartments are $482,000.
Current Stamp Duty Concessions for First Home Buyers in VIC
Currently, if you are an eligible first home buyer who purchases a new or established home in VIC, then you are entitled to receive a 50 per cent reduction in duty
Your settlement date is on or after 1 September 2014;
The property is your principal place of residence, and
The total house and land value is $600,000 or less.
First home buyers soon to pay zero stamp duty
From 1 July 2017
, first home buyers who purchase properties valued at $600,000 or less will pay zero stamp duty
. This new stamp duty concession will apply to both new and established properties. For first home purchases between $600,000 and $750,000, first home buyers will receive a concession which is applied on a sliding scale. This comes as great news for purchasers looking to buy a property within this range as currently there is no stamp duty concession, apart from the standard off the plan concessions.
First home buyers also benefit from First Home Owner Grant changes
As well as first home buyers potentially not having to pay any stamp duty come 1 July 2017, they could also be eligible for the $10,000 First Home Owner Grant
, for purchasers of brand new property under $750,000. However, if buying your first home in Regional Victoria, you can see this grant doubling to $20,000
According to Treasurer Tim Pallas, the stamp duty changes would help about 25,000 Victorians purchase their first home.
On a $600,000 property, a buyer would have to pay approximately $31,000 in stamp duty, compared to a first home buyer who would pay half ($15,535) under the current rules. However, from 1 July 2017, first home buyers will be able to save this $15,535 instead and potentially be awarded another $20,000 from the VIC Government at settlement if they buy in regional Victoria. This can make a big difference in the purchase of a first property.
Best tips for first home buyers
So, if you’re a first home buyer considering buying a property, then you might want to wait until 1 July 2017 to benefit from these new concessions, rather than buying before and potentially missing out on $15,000 stamp duty savings. However, we recommend that it’s best to speak to a Property Consultant such as iBuyNew before July to get the wheels in motion and determine what your borrowing capacity is and what properties you could buy. Once July arrives, you want to be purchasing a property as soon as possible in order to benefit before house prices adjust and increase in value. This also allows you to get in first before the rest of the competition.
Get in touch
To find out more about what VIC off the plan properties we currently have for sale, whether you are looking for new apartments, townhouses or house and land packages, get in touch with the friendly team today on 1300 123 463
If you’re an investor looking to invest in VIC property, then make sure you buy before July 2017 for the greatest benefit. This latest article also makes a great read: Why investors need to buy VIC property before July 2017