Home Property Australia Victoria slashes stamp duty for off-the-plan apartments 

Victoria slashes stamp duty for off-the-plan apartments 

  • October 23, 2024
  • by Property Australia
Victorian Premier Jacinta Allan

The Victorian Governemnt is slashing stamp duty on off-the-plan apartments, units and townhouses to cut upfront costs, speed up building, and make it more to buy off-the-plan.

Premier Jacinta Allan joined home builders at a new apartment building in North Fitzroy today to announce the one-year stimulus.

Currently, first home buyers and owner-occupiers can access a stamp duty concession when they buy off-the-plan, allowing construction costs to be deducted from the sale price when calculating how much stamp duty they owe.

This is currently capped for first home buyers and owner-occupiers: to access the concession, the reduced value for stamp duty calculations following the deduction of construction costs must be under thresholds of $750,000 for first home buyers and $550,000 for owner occupiers – otherwise the concession isn’t available.

Under the changes:

  • Anyone buying an apartment, unit or townhouse off-the-plan can claim the concession – not just first home buyers and owner-occupiers

  • Thresholds will be removed so the concession is available for apartments, units and townhouses of any value

The 12-month extended concession applies from today, 21 October, and it will allow a 100 per cent deduction of outstanding construction and refurbishment costs when determining how much stamp duty is owed.

A Victorian using this concession who buys off-the-plan before any construction work starts could pay around $28,000 less stamp duty on a $620,000 apartment – with duty slashed from around $32,000 to around $4,000.

Premier Jacinta Allan said the change was asked for by industry. 

“We asked industry what they need to build more homes sooner – and this is what they said.

“More apartments and townhouses getting built means more homes for young people and families to rent or buy.”

In a significant advocacy win, the Property Council congratulates the Victorian Government for adopting the industry’s proposal for deeper off-the-plan stamp duty concessions.

While the concessions may only be operational for the next 12 months, Property Council Victorian Executive Director Cath Evans said the announcement will translate directly to the feasibility of new housing projects.

“Apartment and unit developers have been hit hard in recent years by a combination of factors,” Ms Evans said. “Current analysis of the build-to-sell apartment market by Charter Keck Cramer shows apartment commencements in Melbourne have declined to less than 4000 a year.

“Off-the-plan concessions for all purchasers will help bring back new buyers to this important part of the housing market.

“Increasing off-the-plan purchases has been proven to support the feasibility of new housing projects, which in turn unlocks further development. With Victoria’s ambitious housing supply targets in mind, this is a big step in the right direction.

“We welcome the application of these concessions to the townhouse market too, which operates across all parts of the state.”

Ms Evans said it was vital for the performance of the concessions to be closely monitored during the next 12 months, with a view to an extension.

“We have long advocated for positive changes in taxation policy to stimulate the construction of new homes. If this policy directly translates to housing supply, we strongly believe it should continue beyond this initial 12-month period,” Ms Evans said.

“We will continue to advocate strongly over coming months for further positive changes.”