In an early budget announcement, the Victorian Government is extending stamp duty reductions for those buying off-the-plan apartments, units and townhouses for another 12 months.
The budget will include $61 million which the government claims cuts upfront costs saving homebuyers an average $25,000.
KR Peters Director Peter Nicolls said he wasn't surprised to hear the pre-budget day announcement.
"Originally introduced on the 21st October 2024 for 12 months, it was always considered that 12 months was too short a period for the scheme to be totally effective," Mr Nicolls said.
"The further 12 month extension with caps on values removed and permitting all buyers not just first homebuyers and owner occupiers to purchase under the scheme, virtually opens the door for stamp duty savings to all homebuyers."
He said the extension was welcome news for all buyers purchasing off-the-plan and it will also assist builders, developers and estate agents as it will "generate more sales and help productivity".
Stamp duty will be calculated on an apportionment basis depending on the stage of construction when the purchaser signs the contract. The concession allows a 100 per cent deduction of outstanding construction and refurbishment costs when determining how much stamp duty is owed.
An eligible apartment, unit or townhouse is one that is in a strata subdivision – meaning they retain common property such as a driveway or a shared hallway.
The concession savings will not apply to purchasers who are a company or a trustee of a trust.
However, Mr Nicolls warned the measure will do little to make apartments and townhouses more affordable. In fact he predicts the opposite will happen.
"The government is saying that slashing stamp duty for off-the-plan units, townhouses and apartments will encourage more homes to be built and make them cheaper, but this is not what will happen. By slashing stamp duty, prices will rise by $20,000 – $25,000 overnight and the buyers will have to pay more."
To discuss the stamp duty savings extension further and how you can benefit contact the team at KR Peters Real Estate Wantirna 9800 0000 or Officer 5943 1111.