The Victorian government has announced a significant reduction in stamp duty for off-the-plan apartments, units and townhouses in a bid to stimulate the housing market and address the state’s housing crisis.
Under the new scheme, stamp duty concessions will be expanded to all buyers of off-the-plan strata properties, removing the current cap and opening the offer to investors as well as owner-occupiers.
The amount of stamp duty paid will be calculated based on the cost of the land prior to construction, not the total price of the finished property, resulting in substantial savings for buyers.
According to the Herald Sun, a buyer purchasing an off-the-plan apartment for $620,000 with land valued at $77,500 would pay only $4,000 in stamp duty instead of $32,000, representing a $28,000 reduction.
The expanded concessions will be available for one year, starting from October 21, 2024, and ending on October 21, 2025.
Properties currently under construction may also be eligible, depending on the stage of completion.
Premier Jacinta Allan said that the extra relief for aspiring home buyers would lead to “more homes for young people and families”.
The move comes after months of calls from the property industry to remove stamp duty for off-the-plan sales, with experts warning that the restrictive charge was deterring investment and slowing down development.
Property Council of Australia Victorian executive director Cath Evans called the extra concessions a “big step in the right direction”, and said that apartment commencements in Melbourne had declined to less than 4,000 a year.
Urban Development Institute of Australia Victorian CEO Linda Allison welcomed the expansion, and said that tax reform was the “key to reducing the cost of housing” and boosting market confidence.
The Real Estate Institute of Victoria (REIV) also supports the government’s decision, with CEO Kelly Ryan describing it as an important step toward comprehensive stamp duty reform.
“We’re pleased the Allan Government is introducing tax concession measures that seek to incentivise private investment in Victoria’s housing ecosystem,” Ms Ryan said.
The REIV hopes these concessions will stimulate the development of urgently needed higher-density homes across the state and establish a clearer pathway for broader stamp duty reform.
This announcement follows the recent expansion of the Activity Centre program, which introduced 50 new “train and tram zones” for high-density development, aimed at boosting housing supply in Victoria.
“A strong pipeline of new housing in established areas will pave the way for long-term stability in the housing market,” Ms Ryan said.
