24 June, 2021 / Category: Blog
As a property owner or potential new home buyer, it can feel daunting anticipating what’s to come with the proposed stamp duty and land tax changes for Victoria. You might be asking yourself, ‘what are the hidden costs in buying a house?’.
Stamp Duty Victoria: The upcoming shift
The State Revenue Office of Victoria calculates stamp duty on a sliding scale, starting at 1.4% for properties valued at $25,000 and rising to 5.5% for those valued at or above $960,000. For example, on a property worth $2m you would pay $110,000 in stamp duty.
How much is stamp duty in Victoria set to change?
Come July 1st, 2021, we’ll see an increase in stamp duty for purchases over $2,000,000 (which will include the normal $110,000 payable up to $2,000,000 and then changing to 6.5% over $2,000,000).
The Government’s propositions have suggested that buyers in the $2m+ category are wealthy and can afford to pay additional taxes—sadly, for many of inner Melbourne suburbs (that we service), this isn’t the case.
If you’re wondering, ‘Is it a good time to buy property?’, our recommendation is, if you’re purchasing a home and can stretch that bit more to pay the stamp duty, you should. The property market is forecasting increases that will exceed wage growth over the next few years. Property is a long term game, despite these increases to the cost of buying a property, in order to capitalise on current low interest rates, now’s the time to buy.
Land Tax Victoria: Preparing for the increase
We understand that the proposed increase in land tax on July 1st, 2021, may bring an element of apprehension for property investors or aspiring investors.
How much is land tax in Victoria set to change?
While some investors are selling properties, those that sell are likely to be left with a lower capital growth than those that pay the land tax and keep the property. The difference between the forecasted property growth and increase in land tax shows that investors are still better off having investment properties.
How can I make sure I buy well?
At Infolio, we can assist in ensuring you buy well during these unprecedented times. Our passion and expertise help to remove the emotional aspect associated with property purchases and enable you to make informed decisions—minimising transaction costs and maximising your purchase satisfaction.
Unsure where to begin?
Let’s talk about your property aspirations, contact us today.