The Victorian state government has announced they are cutting stamp duty by up to 50%. The news came from a recent budget announcement, that has brought in a number of changes to respond to the impacts of Covid-19. Victoria’s treasurer, Tim Pallas, confirmed that the 50% discount would be available on all newly built homes worth up to $1 million. The discount is available until June 2021, with existing homes eligible for a discount of 25%.
After the strictest lockdown in Australia, this is welcome news for the state of Victoria. The hope is that many people will be able to take advantage of these tax cuts and get into the property market.
If you’re looking to buy in Victoria, now is a great time. Talk to our team today to find out how we can help make buying a house easier than ever.
But for others, you may be wondering, what is stamp duty? How is it calculated and why is this such good news? To give a bit more context, we’ve outlined the basics for you below.
When you’re buying a house, there are extra costs you need to be aware of. One of the biggest costs that you need to budget for is stamp duty. Stamp duty (or land transfer duty) is a tax imposed by the state government. Like all taxes, it’s an unavoidable cost that contributes to the state revenue.
The amount varies depending on the price of the house you’re buying, if you’re a first-time buyer, and some other factors that may make you eligible for concessions. As a rule, the more expensive the property you’re buying, the higher the stamp duty will be.
Stamp duty in Victoria is calculated on a sliding scale, starting at 1.4% for properties valued at $25,000 and below and going up to 5.5% for properties over $960,000. Pensioners are exempt from paying stamp duty if their property is valued up to $330,000, while they get a part concession for properties priced between $330,001 and $750,000.
That means that an estimate of stamp duty on a $500,000 residential home without concession would be $25,070. Cutting this number in half with these new discounts, it means a saving of more than $12,000.
It’s easy to see how stamp duty can get expensive quickly. And with all the other expenses you’re juggling when you buy a house, a few thousand dollars back is pretty good news.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.
