A new government plan has been unveiled to make property much more affordable in Victoria where first home buyers will no longer have to pay stamp duty on properties valued up to $600,000.
This will mean that tens of thousands of first home buyers can save as much as $15,000, not only on new property, but on existing property as well.
Stamp duty is one of the largest costs, besides the actual purchase of the property itself and removing this cost for first home buyers in VIC will dramatically help reduce the cost of buying a property.
First home buyers face a tougher property market
As a first home buyer today, you are facing more hurdles than ever before to get a foothold on the property ladder. Not only do first home buyers have to face rising property prices, but they also have to compete with investors and other owner occupiers. There are also the banks to contend with and tougher lending restrictions in place. And for those trying to save a deposit, lower interest rates mean that you are not getting as much for your money, meaning that shopping around for the best savings account is much more important to make your money go further and to reach your deposit goal faster.
When does the new stamp duty exemption start?
The new stamp duty exemption will start on 1 July 2017 and is set to benefit approximately 25,000 first home buyers every year. On average, there will be $8,000 worth of savings for new or existing homes.
How much can you save with the stamp duty exemption?
Currently, if a first home buyer was to buy an existing property for $600,000, they would incur $15,535 in stamp duty, whilst a $500,000 property would incur $10,985 in stamp duty. In comparison, a $600,000 property in NSW would incur $12,370 in stamp duty, and QLD would incur $12,850.
Current Stamp Duty on a $600,000 Property
Victoria is one of the most expensive states for stamp duty in Australia and this new exemption will be warmly welcomed by first home buyers trying to get on the property ladder.
For those purchasing a property between $600,000 and $750,000
, a concession will be applied on a sliding scale. This new stamp duty exemption will apply to both new and existing homes such as apartments, off the plan dwellings, townhouses and houses, but to be eligible the property must be lived in for a minimum of 12 months. Investment properties though are not eligible for this exemption.
First Home Owner Grant also set to double
The Victorian government have also announced plans to double the First Home Owner Grant
from $10,000 to $20,000
, also starting from 1 July 2017. However, this new grant will only apply to first home buyers purchasing a new property to live in within regional Victoria. First home buyers in Melbourne will continue to receive the $10,000 grant. Both grants are only for the purchase of new property only, not established property.
First home buyers could save up to $35,000
So, with the stamp duty savings and new First Home Owner Grant soon to be available, a first home buyer in VIC could potentially save up to $35,000 on a property, which is definitely not worth passing up. This equates to almost a 10 per cent deposit.
Property prices continuing to rise
According to CoreLogic Home Value index report for February 2017, the median property price for dwellings in Melbourne is now $610,000, with houses sitting at $680,000 and units at $480,000. Dwellings have increased by 1.5% over the past month and are up 5.5% for the quarter and 13.1% YoY.
With property prices the second highest in the country, for many first home buyers property is still out of reach even with the new grant and stamp duty exemptions. However, there are still ways to get on the property ladder, you just need to get smarter.
Get in Touch
To learn more about stamp duty exemptions in VIC and to find out how much you could potentially save when buying a property in Victoria as a first home buyer, get in touch with the iBuyNew team today. We have hundreds of properties to choose from with pricing starting around $300,000 upwards.
Call us today on 1300 123 463
to learn more.