Finally some great news for first home buyers this weekend! From July 1st, for established homes under a $600k purchase price, no stamp duty will apply! I am very much in favour of an additional concession which discounts stamp duty on a sliding scale for homes over $600k up to a maximum of $750k. This is a fresh idea because I have long been of the opinion the existing stamp duty concession, being half the normal stamp duty up to a max of $600k, placed an artificial obstacle in the marketplace and drove lesser valued homes up to that $600k ceiling. A pressure release valve at that point is a great concept.
Another fantastic initiative that was actually announced a couple of days earlier is the doubling of the first home owner grant for those building in regional Victoria. First Home Buyers who build in regional areas will now be entitled to a $20k grant, payable at the time the slab is laid though, please be careful to understand all the facts, we are here to help you there of course!
There is a catch here for investors though, in just one line of their statement, the State Govt could cut unnerve developers by eliminating the stamp duty concession property investors used to enjoy when buying off the plan. This has been a very attractive little bonus for investors that will now only apply to owner occupiers. It’ll be interesting to watch the fall out there!
In addition, homes that are left vacant, with some exceptions, will now have to pay a tax equivalent to 1% of their value. Home banking sets serious restrictions on the available rental stock, I heard in a news report as many as 20,000 homes in the inner suburbs of Melbourne simply sit empty, as the owners, who probably don’t need the rental income simply sit back and enjoy the capital growth.
This will undoubtedly help first home buyers enter the market but there’ll be knock on effects to the rest of the market too. Without first home buyers beginning the chain, those relocating would have less of a market interested in their home for sale.
If you are a first home buyer thinking of entering the market but had though you may not have quite saved enough for the deposit, please feel free to drop me a line to discuss how this can help you get into your first home sooner.