That home may seem out of reach but here's some advice if you're on the property hunt for the first time.
- First home buyers: Stamp duty cuts up to $600,000
- Stamp duty cuts won’t help house price affordability
- Stamp duty savings: What $600,000 buys in Victoria
Developers and builders are copping hits into the tens of thousands of dollars by covering stamp duty for their first-home buyer customers, in order to avoid a lull in the market ahead of the official tax cut later this year.
First home buyers can now save stamp duty – up to $15,000 – on a string of Victorian apartment projects and house and land packages, getting a head start on the state government’s cuts which will come into affect across the board on July 1.
It follows an announcement a fortnight ago by the Andrews government that it would waive stamp duty for all first-home buyers on properties worth up to $600,000 in the new financial year. The move will cease the current stamp duty saving offered to all off the plan purchasers, including investors.
First home buyers won’t have to wait to July 1 to save stamp duty in a string of Melbourne developments, with developers covering the cost. Photo: Stocksy
It is understood many investor-driven developers are moving project release dates forward, in order to to capture investor dollars before the tax cut is removed.
The announcements have been met with mixed feelings by the development industry, given incentives will now fall far more heavily in favour of owner-occupier projects than investor-driven developments.
For those developers and builders who have a large portion of their projects tied to the first-home buyer segment, the July 1 commencement date presented a potential hiatus for the market. Some newly released developments saw an immediate drop in inquiries from first timers.
Investor-driven apartment projects are expected to suffer with the changes to the stamp duty saving. Photo: Graham Denholm
Porter Davis, which will pay the stamp duty for Victorian first home buyers who use the builder for land contracts, brought forward marketing plans to target first-home buyers by several months so it could ride the wave of interest generated by the announcements.
“I was just fearful that people were going to delay their decision,” sales and marketing director Paul Wolff said. “We bought a campaign forward on the back of the hype and leveraging from the government’s media on [the idea of], ‘how does first home ownership happen sooner rather than later?”
Given how quickly land prices were rising, those who waited until July 1 may have lost more than they saved on the tax cut, he said.
Builder Porter Davis says with land prices rising, first timers who wait until July 1 may lose more money than they save on stamp duty. Photo: Jason South
Mr Woolf also said he would retrospectively apply the saving to any first-home buyers who purchased land after October 31 last year and would match the figure if a buyer also received the stamp duty cut from their developer.
Developers of Richmond’s Supply & Co. are offering stamp duty savings even more broadly. All owner-occupier buyers can get the savings, as well as 5 per cent deposits, on the David Street project.
Beller Real Estate’s Heath Thompson, the agent selling Supply & Co. development, said the offer was a way to make the apartments attainable for first home buyers, who may be beaten investors keen to jump on the tax dodge before it ends.
“Investors have an increased appetite to purchase prior to 30th June,” Mr Thompson said. “But first-home buyers may actually miss out because they think ‘we’ll wait’.”
He said the changes to the tax will undoubtedly put more roadblocks in the way for investors, who were already facing stricter lending conditions.
The Eastside Village development in Hawthorn East will also cover stamp duty for all buyers for the next few months and developer Growland will also waive the tax on their Victoria Square (previously Joseph Place) project in Footscray.