The Victorian State Government’s first stage reduction of Stamp Duty for first home buyers, from 30% to 40%, in July 2013 provided a welcome stimulus for new home building. Stamp Duty will be reduced further, to 50% in September 2014. It has been great news for new home buyers. Added to the First Home Buyers Grant it’s a sensational opportunity to speed up home ownership. And the offer is being taken up by hundreds of Victorians every week.
$10,000 is a great opportunity.
The Victorian State Government’s offer (from July 2013) of $10,000 to first home buyers who are buying a new home is the kind of leg-up you could once have only expected from a parent. (Tasmanians currently benefit from Australia’s highest grant – at $30,000 it’s more like a helping hand from a rich aunt).
Combined with the reduction in Stamp Duty in July 2013 from 30% to 40%, it makes the Victorian Government’s intentions very clear – helping first home buyers with an entry point into the market and also providing stimulus for the new home building industry.
The $10,000 first home owners grant applies to buyers of newly constructed homes, purchases of off the plan apartments, house and land packages or units and townhouses with a total purchase or project value of $750,000 or less. The offer does not apply to pre-existing, or ‘second hand’ homes
40% savings on Stamp Duty now. 50% savings from September 2014.
For settlements on or after 1 July 2013 first time home buyers are entitled to receive a 40% reduction on stamp duty, by completing SRO Form 61.
This move brought Victoria into line with New South Wales, South Australia and Queensland. The 40% stamp duty cut applies for all first home buyers for dwellings costing up to $600,000.
It’s part of the government’s election pledge to cut stamp duty by 50% over 4 years. The final 10% reduction will be in September 2014. The concessions are positive action in an era when some commentators claim rising prices will permanently force first home buyers out of the market. The 416 first time home buyers currently taking advantage of the Stamp Duty reduction each week in Victoria prove this argument is not that realistic.
Average savings amount to over $16,500.
The result of the combination of changes means Victorians buying a newly constructed $400,000 first home will be saving over $16,500.
The Government is hoping that as well as assisting people into their own home and creating work for the building industry it will also assist affordability – by creating more housing and reduced house prices, particularly for young Victorians. According to State Treasurer Michael O’Brien “Increasing the First Home Owner Grant on newly constructed properties and boosting the stamp duty concession will make the dreams of many young Victorians become a reality sooner.”
In it’s first six months of operation, to January 2014 over 10,000 first home buyers have taken up the offer and saved almost $58 million from the concession. This usually amounts to over $6,000 in stamp duty savings with the purchase of a $400,000 home.
And more good news is in store – the first home buyers concession will increase further to 50% from 1 September 2014.
This will enable eligible first home buyers to save up to $15,000 on first home purchase stamp duty.