Once approved by Parliament, the State Revenue Office will be introducing changes to stamp duty and land tax as follows:
- Regional First Home Owners Grant increase – for Contracts signed from 1 July 2017 to 30 June 2020 the First Home Owners Grant (FHOG) will increase from $10,000 to $20,000 for new homes built in regional Victoria and valued up to $750,000.00. For new homes in Melbourne, the FHOG will remain at $10,000.00.
- First Home Owners Buyers Duty Abolishment and Restriction – for Contracts signed after 1 July 2017, stamp duty will be abolished for first home buyers purchasing a home with a dutiable value of not more than $600,000.00. For transfers between $600,001 and $750,000, duty will be applied on a sliding scale.
- Transfers between Spouses and Domestic Partners Heavily Restricted –transfers involving commercial or investment properties will no longer be exempt from stamp duty from 1 July 2017. Exemptions for the principal place of residence and for transfers following a relationship breakdown will remain in place.
- Off the Plan Concession Heavily Restricted – for Contracts signed from 1 July 2017, the “off the plan” duty concession will only apply to purchasers who will use the property as their principal place of residence. Effectively, if you are purchasing the property as an investment, you will not receive any savings in stamp duty for buying “off the plan”.
- Vacant Residential Property Tax – from 1 January 2018, this tax (in addition to Land Tax) will apply to dwellings vacant over six months in a calendar year. The tax will be an annual amount of 1% of the capital and improved value (not the site value). Exemptions include holiday homes of persons who have their principal place of residence in Australia, city units required for work, deceased estate properties and certain temporary absences.
- Foreign Capital Gains With Holding – this is an amount that is required to be withheld by a foreign seller at settlement to be paid to the Australia Taxation Office. The rate will increase from 10% to 12.5% and the sale price threshold for the property is to be reduced from $2,000,000 to $750,000.
Please contact us if you are considering purchasing a property and would like further information about the extent to which the proposed changes may affect you.