Stamp duty is one of the larger costs a buyer has to settle aside from the home deposit and mortgage repayments, but many first home buyers make the simple mistake of forgetting to budget for this expense.
With the State Government recently announcing major changes to this tax, we’ve compiled a one-stop guide to equip you with everything you need to know about stamp duty in Victoria.
What is stamp duty?
Stamp duty is a state-imposed tax that pays for the transfer of property from one owner to another. This compulsory tax is levied on a number of asset purchases, but it’s most commonly known as the tax you pay when you buy a house or land.
The rate you pay varies state by state, but other factors also come into play: the type of property you’ve purchased, whether you will be living there as your primary residence and whether you are an Australian citizen.
How will stamp duty change in Victoria?
The Victorian Government 2020/21 budget released on 24 November 2020 revealed that Victoria will offer major stamp duty discounts. These measures were put in place to boost the real estate industry in its stride towards economic recovery post-lockdown.
The government is offering stamp duty waivers on homes worth up to $1 million on contracts entered until 30 June 2021.
Home buyers will save:
- 50% in stamp duty – worth up to $27,500 (on a $1 million property) – for newly built or off-the-plan residential properties
- 25% in stamp duty – worth up to $13,750 – when purchasing existing residential properties.
Stamp duty will be abolished for first home buyers purchasing properties valued under $600,000.
Abolishing such a large tax will encourage first home buyers to enter the property market sooner, with Treasurer Tim Pallas saying the stamp duty changes would help 25,000 Victorians purchase their first home.
How can we help?
Buying a home is a milestone event, often prompting a client’s first encounter with a lawyer. For us, it is a process that we’ve been through thousands of times before so you’re in safe hands.
With more than 35 years in practice, we know the market, the people, and the process involved in buying a home and can advise you on how to stay on top of all of the legal requirements .
Book an obligation-free, confidential consultation today or call us on 03 98785222.
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