In its 2020-2021 state budget, the Victorian government announced that it will invest $6 billion to build more than 12,000 new social and affordable homes and make housing more accessible and affordable for Victorians.
According to the government, the package is Australia’s largest-ever investment in public and community housing.
The $6 billion in housing allocation includes:
- Stamp Duty Waivers
- Big Housing Build ($5.3 billion)
- The Victorian Home Buyer Fund ($500 million)
- Land Tax Waiver
- Extension of the First Home Owners Grant (FHOG)
- System reforms
Stamp duty discounts/waivers
The budget included good news for both prospective Victorian homebuyers and investors:
- A 50% discount/concession on stamp duty for newly built or off-the-plan homes valued up to $1 million.
- A 25% discount/concession on stamp duty for existing homes valued up to $1 million.
This discount/concession on stamp duty in Victoria is applicable for contracts entered from 25 November to 30 June 2021.
How much in stamp duty will Victorians save?
|Buyer||Property Type||Property Value||Stamp Duty Payable (before discounts)||First Home Buyers Concession||New Stamp Duty Discount/Concession||New Stamp Duty Payable (after discounts)|
|First homebuyers||Newly built home||$700,000||$37,070||$24,713||$12,356.5||$12,356.5|
|First homebuyers||Existing home||$700,000||$37,070||$24,713||$6,178.25||$18,534.7|
|Upgraders/Downsizers||Newly built home||$700,000||$37,070||Not Applicable||$12,356||$24,713.5|
|Upgraders/Downsizers||Existing home||$700,000||$37,070||Not Applicable||$6,178.25||$30,891.75|
Also, in a bid to attract more businesses to regional Victoria, a 50% stamp duty concession on the purchase of commercial and industrial properties will be brought forward to January 2021.
Victoria’s Big Housing Build
Victoria’s Big Housing Build has allocated $5.3 billion in funding to construct more than 12,000 new dwellings, including:
- 9,300 social housing dwellings replacing 1,100 old housing units and
- 2,900 mainly affordable and low-cost homes in locations that are close to jobs and transport.
The Build is estimated to support 10,000 jobs on average per year, over the next four years, with 25% of the investments dedicated to regional Victoria.
Victorian Home Buyer Fund
The Victorian Home Buyer Fund is a $500 million program intended to help Victorians get into homeownership sooner.
The fund will contribute to the purchase price in exchange for a proportionate equity interest in the property. This reduces the size of the deposit required and will help Victorians afford their homes sooner.
It will support the purchase of both established and newly-built homes.
Land Tax Discount
To increase the supply of new housing and provide more options for renters, a 50% land tax discount for eligible new developments will be available from 1 January 2022 till 2040.
The intent is to create a build-to-rent sector in Victoria and stimulate construction activity, create jobs and support Victoria’s economic recovery.
These developments will also be exempt from the Absentee Owner Surcharge over the same period.
First Home Owners Grant
The $20,000 Victorian First Home Owners Grant (FHOG) for people buying or building a new home in regional Victoria has also been extended until 30 June 2021.
In areas other than regional Victoria, the grant amount is limited to $10,000.
A total of $111 million has also been allocated to implement different planning reforms and system reforms to grow housing supply, unlock construction activity, unlock private sector investment and support government initiatives.
For more information on the Victorian state budget 2020-2021, please visit: https://www.budget.vic.gov.au/
Are you looking to buy in Victoria?
Whether you’re looking to buy new or an existing property, you need a reliable home loan pre-approval, so you can confidently put in an offer.
Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or by filling in our online assessment form to get pre-approved.