Major stamp duty discounts unveiled in Tuesday’s state budget are expected to provide “massive savings” for homebuyers — and a “real shot in the arm” for the housing sector.
Victorian real estate and construction industry figures have praised the government’s move to halve stamp duty for those buying new builds valued at less than $1m, up until June 30 next year. This will equate to discounts of up to $27,500.
And Victorians buying established homes in the same price bracket and over the same period will benefit from a 25 per cent saving, valued at up to $13,750.
“The aim here is to get as many people in that price bracket and below back into the housing market,” Treasurer Tim Pallas said.
The Urban Development Institute of Australia’s Victorian chief executive Danni Hunter said this was “exactly” what her organisation had asked of the budget.
“Stamp duty certainly is a barrier for people to buy a new home. It’ll be a real shot in the arm for the new housing sector,” she said.
“It recognises that the construction of new housing is a really important economic multiplier and locks in jobs.”
Ms Hunter said the move complemented other budget measures — notably a $5.3bn investment in social housing and land tax discounts of 50 per cent for developers who delivered build-to-rent housing — to create “the most comprehensive housing package in a generation”.
“Allowing more build-to-rent projects to be viable in Victoria will give renters more options and increase the quality and attainability of housing,” she said.
Property Council of Australia Victorian interim executive director Matthew Kandelaars expected the stamp duty waivers to have “an immediate and positive effect for first-home buyers, families and retirees”.
“This targeted measure will pull forward economic activity and get development happening across the state, getting Victorians into work and into homes,” he said.
“This is a hard hats and hi-vis budget.”
Real Estate Institute of Victoria president Leah Calnan agreed the benefits would “filter across a number of property purchases, from the older generation who are wanting to downsize to first-home buyers”.
“It’s also another incentive for buyers to start looking regionally,” she said.
Real Estate Industry Partners chief executive Sadhana Smiles added the “long-awaited” changes to stamp duty would “stimulate the economy and benefit businesses that work alongside people buying and selling homes”.
The 50 per cent new-build discount in particular would “encourage people to buy in the city’s growth corridors”.
“This is great news for first-home buyers and investors in particular because … affordability has been a huge issue,” she said.
Ray White Victoria chief executive Stephen Dullens expected many budding buyers who were forced to pause their plans during the stage four coronavirus lockdown to use the discounts to “make up for lost time”.
“It’s also good for vendors who have been holding back because they were uncertain about the market,” he said.
“This will encourage people back into listing and help the market to return to something as normal as can be.”
And realestate.com.au chief economist Nerida Conisbee said sub-$1m buyers who were often “scraping money together for their purchase” would enjoy “massive savings” from the budget measure.
“Stamp duty has been a major restriction for property transactions, so this will encourage turnover of stock,” she said.
Ms Conisbee added the build-to-rent land tax discounts would help improve “stability of rent and tenure” for Victorian renters.
“These developments offer things like flat rental rates for a five-year period and don’t charge a bond,” she said.
“It really does provide stability of rent and tenure, where you can have a contract as long or as short as you like.”
The New South Wales state government also announced a proposal to overhaul its stamp duty system last week, with public consultation underway until March 2021.
Under that plan, property buyers would be given the option of paying an annual land tax instead of a hefty lump sum.
The new tax would eventually replace stamp duty and the existing land tax scheme altogether.