The State Government recently announced a range of new initiatives for first home buyers in Victoria. If these initiatives are approved by the Victorian Parliament and the legislation is passed these changes will come into effect on the 1st July 2017. Buyers agent Melbourne, Luxton property, outline below the important information in relation to stamp duty that you need to know before buying your next property.
As the housing market in Melbourne continues to skyrocket due to factors such as strong population growth, low interest rates and an increase in foreign buyers, housing unaffordability is at an all-time high. According to the latest Demographia report in January 2017, the price of the median Melbourne house is 9.5 times the median salary, meaning that it takes almost 10 years of household income to buy a median value house in Melbourne. This report placed Melbourne as the 6th least affordable city to buy a house in 2017. No wonder the government is trying to introduce measures to assist first home buyers in Melbourne attain the great Australian dream of owning their own house.
The Victorian Government is proposing the following changes:
- Abolishing stamp duty for first home buyers who purchase a new or existing property under $600,000 on or after 1st July 2017
- First home buyers purchasing a new or existing property between $600,000 and $750,000 will also receive a tapered discount on their stamp duty
- The government will double the first home owners grant to $20,000 for new homes purchased in regional Victoria by a first home buyer
- Off the plan (OTP) concession – will only apply to buyers purchasing an OTP property to occupy as their home (principal place of residence)
If you’re wondering whether you are eligible for the first home owners grant, below we have summarised the five eligibility criteria that an applicant must satisfy, including:
- No applicant can have previously received a grant in any state or territory of Australia, including the applicants spouse or partner
- The applicant (or their spouse/partner) must not have previously owned a residential property, whether on their own or with another person before 1 July 2000 or must not have occupied, for a period of at least six months, a home in which either of you acquired a relevant interest on or after 1 July 2000 in Australia
- The applicant must be a natural person aged at least 18 years at the time of settlement or completion of construction
- At least one applicant must be a permanent resident, an Australian citizen or a New Zealand citizen holding a special category visa
- The applicant must live in the purchased property as their principal place of residence for a continuous period of at least 12 months, within 12 months of settlement of the purchase or completion of construction of the home
You can find the full first home owner grant eligibility criteria here. Of course with any initiatives to help buyers save money on purchasing a new home there are always ramifications. It is likely that these new stamp duty changes will further boost the market and make property even more unaffordable, so keep in mind that although you will be saving on stamp duty, it is likely that these initiatives will increase demand at this end of the market and therefore bump up prices. As with any big investment/life decision, it is always best to have a professional (in this case buyer’s agent) on your side to make the process a lot smoother and to save you from making costly errors.
At Luxton Property Group we specialise in purchasing property for first home buyers and investors. You might just be starting out in the property market or be a seasoned property investor looking for an edge. The above is just a small glimpse in to how we save our client’s money. We have been buying property for over a decade and have a superior buying service at a more affordable price. Request a call today to speak to one of our property buying experts for a no obligation discussion on how we can assist you with your next purchase.