Downsizers buying new apartments in Melbourne’s inner-city will be able to dodge up to $55,000 in stamp duty, as a result of the Victorian Government’s 2021-22 budget.
The stamp duty concession was a glimmer of good news for home buyers, among a budget that also contained a series of other property tax hikes.
From 21 May 2021, people buying new apartments in the Melbourne City Council area worth up to $1 million will not pay stamp duty, if the property has been completed for at least 12 months and has not sold. This represents a stamp duty saving of $55,000.
If the apartment has been unsold for less than 12 months, a 50 per cent stamp duty cut will apply from 1 July 2021.
The concession scheme expires on 30 June 2022, and is expected to cost the government $33.2 million in 2021-22.
The measure is designed to spur economic activity in the Melbourne CBD, to help it recover from the impacts of the government-imposed 2020 and 2021 COVID-19 lockdowns.
Media reports have stated that, with the closure of international borders stopping international students and workers from entering Australia, there are now thousands of empty and unsold apartments in Melbourne’s inner-city.
The government’s stamp duty concession now opens the door for downsizers to snap up these apartments.
The Melbourne CBD stamp duty concession sits among a series of other property tax nasties outlined in the budget, which are targeted at developers or high net worth individuals. These include:
- Increasing stamp duty on properties worth more than $2 million, which will raise $136.7 million in 2021-22
- A windfall gains tax on property rezonings, which will apply from July 2022 and raise $38.7 million in 2022-23
- Increasing land tax rates for investors with more than $1.8 million in land holdings from January 2022, which is expected to raise $335.9 million in 2021-22
Sadly, the Victorian Government didn’t increase the $750,000 price threshold on its pensioner stamp duty concession scheme - which is rapidly making this scheme of little use to pensioners buying in the Melbourne metropolitan area.
Comment from our CEO
Downsizing.com.au CEO Amanda Graham says “we know that the prospect of paying stamp duty is a major barrier for many potential downsizers.”
“This opportunity to buy a new apartment free of stamp duty will be very attractive to those downsizers thinking about relocating to inner urban locations in Victoria.”
“It will definitely encourage more people to take advantage of the current property market boom in prices for freestanding houses, making it a perfect time to downsize."
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