The Victorian government decided on March 5th that there is no longer a Stamp Tax Duty if you are buying your first home for less than $600,000. This means that you do not need to save as much money as before, making it easier to purchase a new home.
Stamp duty has become a rising cost for first home buyers. The government says that the goal of this move is to enable first time home buyers to be able to buy and get into their home faster. Rising house prices in recent years has made it hard for people to buy their own home. Victorians can now purchase their dream home because it will now cost less. The program is scheduled to start on July 1, 2017.
The greatest amount of savings for home buyers who buy a home worth $600,000 will be as much as $15,535. That is the amount that would normally be charged by the stamp tax for those homes. It is expected that as many as 25,000 people will take advantage of the offer, which will be applied to purchases of new and established homes.
Home buyers purchasing a home between $600,000 and $750,000 can also see some reduction of the Stamp Tax on those properties. Their savings will be based on a sliding scale.
The plan to remove the stamp tax only applies to homes that are going to be used as primary residences. Investors will need to look elsewhere to find savings on their property purchases.
Besides the removal of the stamp tax, first time homeowners can still benefit from the first home owner’s grant. This grant gives them $7,000, meaning that they are able to buy a home with less money being saved for a downpayment.
In January of next year, the “HomesVic” program will also get its start. This program lets homebuyers purchase a home with the help of money from the government. The government will offer to help them by contributing up to 25% of the equity share. This will reduce the amount the homeowner needs to buy the property.
This program is aimed at helping people who earn less than $95,000. Buyers will have to come up with five% to be considered eligible. The government will recover its money when the property is sold.
Another tax will be brought in at the same time the stamp tax is removed for homes under $600,000. It is called the Vacant Residential Property Tax. Its purpose is to address the many vacant properties in Melbourne and it will charge a rate of one% times the value of capital improvements.
If you live in Victoria, or are a first home buyer looking to invest, then there is hardly a better time to be able to get your first home. The elimination of the stamp tax means you can get in your home sooner; all you need to do is to apply for a new home loan. Get your mortgage application in today and be in your new home soon.