Stamp duty slashed in Victoria's big housing budget

Stamp duty discounts, a planning revamp and a major building boost are on the horizon in Victoria, as the state government leans on the property sector to underpin the state’s economic recovery from COVID-19.

Victorian Premier Daniel Andrews and Treasurer Tim Pallas unveiled a suite of measures in their state budget, aimed squarely at reviving an economy that took Australia’s hardest hit from the COVID-19 pandemic.

Highlighting Victoria’s 2020-21 Budget for the property sector is a 50 per cent cut to stamp duty for newly built or off-the-plan property purchases for dwellings valued up to $1 million, which will be in place until June next year.

Buyers of established homes won’t miss out, with a 25 per cent cut to stamp duty to be put in place over the same period for existing dwellings.

The stamp duty changes follow speculation that Victoria would follow the lead of New South Wales in reforming the tax, which is seen as a major impediment for buyers entering the property market, as well as those looking to trade up or downsize.

Mr Pallas said the stamp duty changes were over and above existing concessions for first home buyers.

“With a waiver on stamp duty, we'll help more Victorians find their home and get more Victorians back to work,” Mr Pallas said.

A 50 per cent discount on land tax will also be provided for developers in the build-to-rent sector from 2022.

In total, the Victorian government has provided more than $293 million in tax relief in this year’s budget.

Victoria’s construction sector will also receive major support, with a $5.3 billion initiative to result in 12,000 new homes being built across the state over the next four years.

The Big Housing Build initiative will boost Victoria’s social housing supply by 10 per cent over the next four years, delivering 9,300 social housing homes and replacing 1,100 public housing units.

Housing Minister Richard Wynne described the housing investment as unprecedented.

“We’re delivering the biggest investment in social housing Victoria has ever seen,” Mr Wynne said.

“We’re not just investing in bricks and mortar, but the lives of Victorians for decades to come.”

Also boosting the development sector is a major change to Victoria’s planning system, eliminating unnecessary red tape and bureaucratic delays.

A total of $111 million will be invested to speed up delivery of major projects and boost the construction of social and affordable housing. 

Planning decisions for major projects and social and affordable housing will be streamlined, making it easier for builders to include affordable housing in their developments.

Around $15.7 million will be invested to upgrade digital systems for permit and planning scheme amendments, while $4 million will be spent to help councils upgrade planning permit systems.

A further $14 million will be provided to the Victorian Planning Authority to support local councils’ efforts to streamline approvals.

Mr Wynne, also Victoria’s Planning Minister, said the investments would result in strong communities and a jobs boost.

“As we begin rebuilding from the pandemic, we need a planning system that is set up to drive growth and create jobs as we recover from coronavirus - that’s what these reforms will do,” Mr Wynne said.

“This year we’ve seen just how much can be achieved online.

“We want to build on that strength, creating an easy, online and accessible planning and permit system.”

Property Council of Australia interim executive director, Matthew Kandelaars, said the “big and bold” budget was right for the current economic conditions.

The budget represents the biggest spend in Victoria’s history, and is underpinned by a historic infrastructure investment, Mr Kandelaars said.

“Today’s stamp duty waivers will have an immediate and positive effect for first home buyers, young families and retirees,” said Mr Kandelaars.

“This targeted measure will pull forward economic activity and get development happening across the state - getting Victorians into work and into homes.”

“We also commend the Government’s support for the emerging build-to-rent sector, which will create jobs and provide high-quality rental product for Victorians.”