But eligible properties must be off the plan and part of a strata subdivision, meaning detached homes or house and land packages are not included.
Savings will depend on how much construction has already occurred. A property that is half-complete will incur stamp duty on the value already finished, but a buyer can receive the concession for the other half. A home that hasn’t started will be able to access the full cut.
The government estimates someone buying an off-the-plan apartment that has not yet started would pay about a quarter of the stamp duty they typically pay.
The property industry has long campaigned for stamp duty reform and more recently said sales have slowed with higher interest rates. It has caused projects to stall as developers wait longer to start construction so they can accumulate enough pre-sales for plans to financially stack up.
“We asked industry what they need to build more homes sooner – and this is what they said,” Allan said.
“More apartments and townhouses getting built means more homes for young people and families
to rent or buy.”
Urban Development Institute of Victoria chief executive Linda Allison said the concession would help get investors and homebuyers back into the market.
“Victoria’s property taxes have been a barrier to homeownership and home building; today’s
announcement to expand off the plan concessions is a positive step,” she said.
“While we recognise the challenging budgetary position for the Victorian government at present, tax reform is key to reducing the cost of housing and giving consumers and investors confidence to buy an apartment or townhouse in Victoria. These expanded concessions are a good start.”
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Allison said she recommended the measures extend past the 12-month deadline to give buyers time to save and search for homes, and also called for a review of other taxes such as those limiting foreign investment.
“Victoria is a global destination; to ensure we have a variety of housing options, we need to be
welcoming global investment – not putting up barriers by way of punitive taxes,” she said.
Property Council Victorian executive director Cath Evans said the change would support the feasibility of new housing projects even with its tight timeline.
But she also supported a possible extension if it was shown to have succeeded in boosting supply.
“Current analysis of the build-to-sell apartment market by Charter Keck Cramer shows apartment commencements in Melbourne have declined to less than 4000 a year,” Evans said.
“Off-the-plan concessions for all purchasers will help bring back new buyers to this important part
of the housing market.
“Increasing off-the-plan purchases has been proven to support the feasibility of new housing
projects, which in turn unlocks further development. With Victoria’s ambitious housing supply
targets in mind, this is a big step in the right direction.”
Evans said it was good the concession applied to townhouses, which could be found across Victoria.
Treasurer Tim Pallas said the change would significantly reduce upfront costs for buyers and builders.
Allan said Victorians would hear more announcements over the coming days about housing and how the government would provide more services around the areas where thousands of new homes will be built.
