We have had many conversations with clients around the implications of the 2017 State Budget and its impact on property. It seems worthwhile to pass this information in summary form as the state government has been very quiet on some of the more adverse changes to the law. Please find below a brief summary with links to further information.
1. Stamp duty exemptions
Post 1 July 2017, first home owners purchasing a home with a dutiable value up to $600,000 will not be required to pay stamp duty. Previously this was a 50% exemption. The concession will apply on a sliding scale if the property is valued between $600,001 and $750,000.
2. First home owner grant (FHOG)
The current First Home Owner Grant (FHOG) is a payment of $10,000 available to eligible first-home buyers who buy or build their new home valued up to $750,000
Further to this from 1 July FHOG payment of $20,000 is for first-home buyers who buy or build their new home valued up to $750,000 in regional Victoria.
3. Transfers of property between spouses
A transfer of property between spouses is currently exempt from stamp duty. Post 1 July 2017, the exemption will only apply to a transfer of principal places of residence between spouses, and transfers of property following a relationship breakdown.
4. Off the plan (OTP) concession
The OTP has been largely ABOLISHED (“retargeted” in government speak). Post 1 July the OTP will only apply to buyers who occupy the property as their principal place of residence (PPR) with a value of no more than $550,000 (or $750,000 for first home buyers).
5.Vacant Residential Property (VRP) Tax
From 1 January 2018, some property owners in the inner and middle suburbs of Melbourne will pay an annual tax of 1% (calculated on the capital improved value of the property) if their property is unoccupied for more than a total of 6 months in a year.
The SRO will receive funding to monitor this.