Victorian housing affordability package

Victorian housing affordability packageThe Victorian Government has announced a raft of housing affordability policy initiatives including stamp duty relief for first home buyers and $1 billion dedicated to a Social Housing Growth Fund.A table which summarises the Government package can be downloaded using the link below. Fact sheets outlining each of the measures are available at the Homes for Victorians website.The Property Council commends the Government’s focus on creating more capacity for first home buyers to enter the housing market but urges them to commensurately support the supply of housing options for all Victorians.Given the State’s median house price is just over the stated stamp duty exemption and concession thresholds, this requires careful consideration and engagement.Abolition of Investors’ Stamp Duty ConcessionOf most concern to the Property Council is the abolition of the stamp duty concession for investors for contracts entered from 1 July, 2017.Our initial review of the data reveals that the investor market underwrites the concept to completion of new apartment projects. Investors pre-purchase more than % of the off-the-plan apartments, making the projects financeable and enabling the developer to proceed with construction. The Investor market also provides rental properties, a significant part of the solution for housing affordability in Victoria. Stamp duty concessions for off-the-plan purchases has been a competitive advantage for Victoria; its abolition may have long term implications for our economy.Vacancy TaxThe Government has also introduced a vacancy tax to be levied on investors who leave their properties empty in the inner and middle ring.They will be working with utility companies to identify which properties are vacant. It is proposed that the Vacancy Tax will be introduced on 1 January, 2018 with extensive exemptions. The Property Council has previously stated that it will not support another tax on property and awaits further details on how this will be calculated and levied.Next StepsWe look forward to working with the Government as it releases the full details of its policy program and understanding the implications for Victoria.In the absence of detail, we assume that the Government is not seeking to increase its tax revenue at the expense of the residential property industry, and we look forward to working with Government to ensure that a considered approach which maintains housing choice and a sustains our residential property sector’s contribution to the economy.The Property Council supports initiatives that address housing affordability whilst maintaining a balance in the property market.More InformationProperty Council media releaseSummary of initiativesHomes for Victorians website