Victoria's Latest Stamp Duty Policy

"Countdown 7 months!" The Victorian government has launched a groundbreaking policy, offering Melbourne homebuyers a once-in-a-decade opportunity to save big. Starting from 21 October 2024, buyers of off-the-plan apartments and townhouses will enjoy 50% to 100% stamp duty discounts!

I. Key Policy Changes

1. Expanded Eligibility

Properties Covered: Off-the-plan apartments, townhouses, and units (new or existing).

Applicable Buyers: Open to all, including first-home buyers, investors, locals, and overseas purchasers.

Timing: Contracts must be signed between 21 October 2024 and 21 October 2025.

2. Enhanced Discounts

Construction Cost Deduction: Building costs incurred post-contract signing can be deducted from the taxable value.

Example: For a $1 million property with $300k construction costs, taxable value drops to $700k.

Double Benefits: First-home buyers purchasing off-the-plan properties under $600k qualify for “full stamp duty exemption + $10k FHOG grant”.

3. Rules for Overseas Buyers

Surcharge Remains: Overseas buyers must pay an **8% surcharge** on the pre-discount taxable value.

Exemption: Applies if purchasing with an Australian citizen/PR spouse for owner-occupancy.

II. Who Benefits Most?

1. First-Home Buyers: Maximum Savings

Case Study: $650k apartment with $200k construction costs.

Taxable value: $450k → $0 stamp duty(vs. original $18,770).

2. Investors (Including Overseas)

Case Study: $1.5M townhouse with $500k construction costs.

Taxable value: $1M→ $55k stamp duty (vs. original $96,670), saving $41k+.

3. Developers & Builders
Expected 15% surge in apartment supply due to increased presale demand.
 

III. Market Impact

1. Short-Term Surge:

30% rise in off-the-plan sales (Q4 2024–Q1 2025), especially in hotspots like Southbank and Box Hill.

2. Price Trends:

Apartments in prime areas may rise 5–8%; mid-range townhouses ($800k–$1.2M) likely to see highest demand.

3. Long-Term Outlook:

If annual housing supply grows by 50k units, price growth will stabilize post-2026.

IV. Pitfalls to Avoid

1. Exclusions:

Applies “only to off-the-plan apartments/townhouses” (not houses, land, or commercial properties).

2. Residency Requirement:

First-home buyers must “live in the property for 12 months” or repay the discount.

3. Overseas Surcharge:

Calculated on the “pre-discount value”.

Example: $700k taxable value → $56k surcharge (8% × $700k).

V. FAQs

Q1: Can I claim the discount if settlement occurs after October 2025?

A: Yes, if the contract is signed before 21 October 2025.

Q2: Are multiple purchases allowed?

A: Yes, no purchase limits for investors.

Q3: How to maximize savings?

A: Target properties under $550k to combine stamp duty exemption + other grants.

VI. Summary & Suggestion

This policy is a golden window for buyers:

Owner-occupiers: Prioritize sub-$600k properties.

Investors: Focus on high-rental areas (CBD, universities).

Warning: Verify pricing trends to avoid developer markups.