As part of its coronavirus relief measures, the Victorian Government has announced a range of stamp duty relief incentives:
- waiver of up to 50% on purchases of residential property in Victoria with a dutiable value of up to $1 million — applies to contracts entered into on or after 25 November 2020 and before 1 July 2021
- 50% stamp duty concession for commercial and industrial properties in regional Victoria — applies to contracts entered into on or after 1 January 2021
What do these changes mean to you and how could you benefit from these changes? Let’s take a look.
For residential property buyers
This includes a stamp duty concession of up to 50 per cent for residential new builds where the contract value is up to or less than $1 million (note this includes off-the-plan homes). Existing homes will receive a further 25 per cent discount (in addition to existing stamp duty concession for first home buyers).
These concessions apply to residential property contracts signed between 25 November 2020 to 30 June 2021.
How much dollar savings can you realise from this change?
The new change means that buyers can now access discounts of up to $27,500, because you may be eligible for – and receive – more than one concession! We’ve previously written about existing stamp duty concessions here.
A first home buyer, for example, purchasing a new home worth $700,000 would be eligible for both the existing first home buyer duty concession and the new 50 per cent waiver, totalling tax relief of some $24,700.
For regional commercial and industrial property buyers
In a bid to lure businesses to regional Victoria, the changes also fast-track a 50 per cent stamp duty concession on the purchase of commercial and industrial properties starting from January 2021.
This includes property currently being used for these purposes, as well as property converted to one of these uses.
What constitutes commercial or industrial property?
To be eligible for the concession, the property being acquired must fall into one of the accepted categories (codes 210-299 and 310-399, and 400-499) in the Australian Valuation Property Classification Code (AVPCC).
Examples from the accepted codes include but are not limited to:
- office premises;
- car parking;
- advertising or public information screens;
- manufacturing; and
- warehouses and storage yards
What qualifies as regional Victoria?
Regional Victoria includes properties located in one of the municipal districts listed in Schedule 1 of the First Home Owner Grant Act 2000, which includes 48 Council areas, including the cities and surrounds of Ballarat, Bendigo, Geelong, the areas surrounding Gippsland, the Bass Coast and Macedon Ranges.
How much is the concession amount?
With the new changes, it’s a great time for business operators to expand or open their operations into regional Victoria.
For example, if you purchase vacant land worth $1 million in January 2021 intending to build a restaurant, the duty chargeable on the transfer would be $27,500 (i.e. $55,000 reduced by 50%).
How can W Legal Group help?
Apart from the contract price, stamp duty is usually the biggest cost involved in the purchase of a property. Seize the opportunity now as the new arrangements have offered Victorians a generous reduction for property transactions.
We consider ourselves to be specialists in Victorian property rules and regulations. Click here everything you need to look for when engaging a conveyancer. If you would like to discuss your conveyancing transaction, please call our office to make an appointment, or book online. We would be pleased to discuss your specific circumstances with you.