On Tuesday, November 24, Victoria adopted its state budget for 2020-2021, revealing a series of supportive measures designed to boost the housing market and construction industries, including tariff cuts stamp of up to 50%.
Following the news, Australian Broker spoke with Damien Roylance, Founder and Managing Director of Victoria-based Entourage Group, to discuss some of the key points of the changed stamp duty rules.
1. The savings are different for new and existing homes – and there is a price cap.
The 50% total stamp duty exemption in Victoria applies to those who buy newly constructed homes worth up to $ 1 million, while Australians who buy existing homes may benefit from 25% exemption up to a maximum of $ 1 million.
“People now think 2021 will be a very positive year for real estate,” Roylance said.
"The market is actually pretty good right now, so add it in, add the interest rates with one in front of them, and they really don't let this market crash."
Roylance also pointed out that first-time buyers of a property priced between $ 600,000 and $ 750,000 – and therefore are not eligible for full stamp duty relief, but receive a concession under existing aid – can now combine that with the 25% or 50% off stamp duty, at least for the next six months or so.
2. Rebates have an expiry date.
Stamp duty exemptions are only available from this week to the end of June 2021 – a relatively short window of seven months.
"With this June 30 deadline, people could be pressured into doing things over the next six months," Roylance said, explaining that he expects to see some sort of thing soon. Increase in activity in the housing market.
"Some might be rushed to get their place in the market to take advantage of buyers benefiting from the lower stamp duty now, or others might want to buy before June 30 to make sure they can save."
Due to the deadline, Roylance would not be surprised to see "a little inflated prices" over the next six months as well.
3. It could drive up people's prices.
Although the initiative aims to reduce the amount of savings borrowers initially need to enter a home, Roylance expects some people to increase the price range of the properties they plan to make. thanks to the reduction in stamp duty.
"We could see people's budgets increase by the amount they save," he said.
"The sellers will probably reap the rewards and make a little more money, and the sellers will earn, because the buyers will have about $ 10,000 more to spend."
“It might encourage more people to sell, which is good because inventory levels are still pretty low,” Roylance added.
4. Discounts could help bring investors back into the market.
Roylance pointed out that unlike many stimulus in the housing industry, the rebate isn't just for owner-occupiers.
"The government is still looking to support first-time buyers, but investors will now also save on stamp duties, so they can probably compete more with first-time buyers," he explained.
“Because investors will benefit as well, they could come back to the market a little more.”
5. Stamp duty relief is part of something bigger.
The Victoria State Budget really pushed its 'Big Housing Build', introducing a range of initiatives all aimed at creating and sustaining jobs in the construction industry and generate more affordable housing.
The budget allocated $ 6 billion directly to building over 12,000 new social and affordable housing units, while the first state grant of $ 20,000 for people buying or building a new home in the Victoria area has been extended until June.
As such, it is clear that stamp duty discounts play a role in the state's larger efforts to support tens of thousands of Victorians in the construction industry. .
"This loan cap [size] appears to be targeting people looking in all new housing estates in the state with these new properties of around $ 500,000," Roylance said.
"Everything seems to be negotiating around building more houses and keeping those jobs."
