First home buyers, stamp duty exemptions and grants: Victoria versus NSW

First home buyers, stamp duty exemptions and grants: Victoria versus NSW
First home buyers, stamp duty exemptions and grants: Victoria versus NSW

Proposed reforms to changes in stamp duty, first home-owners grants, shared equity and clamping down on underquoting by the Victorian government will be compared to the current rules and regulations in the New South Wales jurisdiction according to TressCox lawyers.

In a research note, TressCox said with the Victorian election just over a year away and housing affordability becoming a nation-wide issue of interest, it is of no surprise that the Victorian government is looking to implement major reforms to improve access to the housing market for first home-buyers.

"The proposed changes in Victoria will now be compared to the current rules and regulations in the New South Wales jurisdiction," it said.

"The Victorian government has proposed to completely abolish stamp duty for new and existing properties that are up to $600,000.

"Properties that are between $600,000 and $750,000 will have their stamp duty discounted.

"The current regulations also allow for concessions for pensioners for properties valued at up to $750,000 and for those individuals using the property as the Principal place of Residence for properties valued at up to $550,000.

"The Victorian proposal is subtly, yet critically different to stamp duty exemptions in New South Wales.

"The NSW exemption under the First Home – New Home Scheme only applies to homes which are of a value of up to $550,000.

"Similar to the Victorian proposal, the NSW rules do provide concessions in stamp duty for homes valued between $550,000 and $650,000.

"An exemption also exists for the purchase of a vacant block of land valued at up to $300,000 where the purchaser wishes to build their home.

"Concessions are available for vacant land valued between $300,000 and $450,000.

"It is important to note that unlike the proposed Victorian reforms, the stamp duty exemption and concession for first home buyers in New South Wales only apply to brand new homes and not existing properties.

"Currently, the Victorian rules provide a $10,000 grant for first home owners on new homes valued at up to $750,000.

"The Victorian proposals seek to incentivise purchases of property in regional areas by doubling the First Home Owner Grant to $20,000 from 1 July 2017.

"Prior to 2012 In NSW, the First Home Owner Grant provided a $7,000 grant for eligible transactions. However, for all contracts entered into after 1 October 2012, the grant applies only to new homes which do not exceed a value of $750,000.

"The transaction date of the sale of land is particularly important in NSW as it defines the grant amount a purchaser may be eligible for.

"For instance, transactions for new homes under the NSW scheme dated between 1 October 2012 to 31 December 2015 could be offered a grant of $15,000.

"Transactions from 1 January 2016 may be eligible for a grant of $10,000.

"Changes to Victorian laws provide that the concession will now only be applicable to home buyers who intend for the property to be their principal place of residence and will no longer be available for residential investment or commercial properties.

"NSW provides a $5,000 grant for purchasers of new homes which are either new homes or off the plan which are valued at up to $450,000.

"In a bid to combat vacant properties held by investors, the VRPT will be applied to properties which remain unoccupied for over six months in a calendar year.

"The tax will include some exemptions for properties used as holiday homes, for work purposes, deceased estates and for Victorian owners who are temporarily overseas.

"The tax is slated for implementation on 1 January 2018 and the current rate proposed will be 1 percent of the capital improved value of the property.

"At this stage, the new tax in Victoria does not have an equal counterpart in NSW."

For more information visit www.tresscox.com.au.

Tags: 
First Home Buyers Victoria

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