Summary of Property Tax Changes in Victoria.
Lots of activity in property tax & concessions in Victoria, with a sledgehammer of the State Budget softened by varying concessions. First the taxes:
Land Tax
Land tax will increase by up to 0.30%, starting at taxable land holdings between $1.8 million and $3 million, through to the 0.30% increase for taxable land holdings above $3 million.
Stamp Duty
Victoria will extend its property stamp duty tiers, where a 1% premium will be introduced for property transactions above $2 million.
Data below prepared by Pitcher Partners & PWC provides a comparison of the structure of State Government taxes across Australia. The changes now cementing Victoria as a highest taxing state, which is drawing criticism especially when public sector costs are also comparatively high.
Developers have been targeted too, with a new windfall gains tax to be introduced for properties where the valuation is boosted by a council rezoning.
The graph also explores the different strategies of charging upfront taxes, versus the annuity styled revenue of land taxes. With escalating property prices, the Government will see property as good target for tax revenue.
Property Concessions
Working the other way, the Government Victoria is trying to stimulate movement in the Melbourne's unsold apartments. This will include extending a policy to waive stamp duty on newly completed homes that have been unsold for a year or more, and from July 1 it will include waivers on new off-the-plan purchases worth up to $1 million.
These concessions for new off-the-plan purchases – based on the market value of a property (excluding construction costs post signing of a contract) is an incentive to encourage buyers to get into the market sooner.
With this value threshold being increased to $1 million, the existing thresholds of $550,000 for owner-occupier buyers and $750,000 for first home buyers are effectively extended.
Public Housing
The State Government has also confirmed a plan to create 1,110 new homes on government-owned land in Brighton, Flemington and Prahran, as part of its $5.3 billion public housing build. This will replace existing social housing units which have already been demolished.
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