Homebuyers to bank 50 per cent stamp duty discount for new builds under $1 million

Victorian homebuyers are set to save thousands of dollars under a massive stamp duty discount announced in the state budget.

Homebuyers will save tens of thousands of dollars when buying properties worth less than $1 million under a massive stamp duty discount to get the real estate market chugging along.

Treasurer Tim Pallas on Tuesday revealed the state government’s affordable housing initiative would be backed by an unprecedented waiver on property-related charges.

Until June 30 2021, Victorians who purchase new builds valued under $1 million will receive a half price discount on stamp duty up to $27,500.

Homebuyers will also be able to claim a 25 per cent saving, up to $13,750, for existing properties over the same period.

Mr Pallas said the decision to cap the payments at properties worth up to a million was about stimulating activity where it would be most effective.

He said it was also to help to get more people into affordable housing.

“Our aim is effectively to ensure we can do as much of the heavy lifting in the areas where the community needs the most assistance,” Mr Pallas said.

“There’s no doubt this industry is struggling … In no small part because of the social distancing arrangements that were necessarily in place.

“The aim here is to get as many people in that price bracket and below back into the housing market.”

Michael Mittiga and partner Nazanin Raad bought their first home this year. Picture: Toby Zerna

Property Council of Australia Victorian Interim Executive Director, Matthew Kandelaars, said the stamp duty waivers would have an immediate and positive effect for first home buyers, Victorian families and retirees.

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

In the June quarter, the median price of properties sold was $700,000 for houses and $570,000 for apartments.

Its expected properties under $1 million could make up more half of those sold while the scheme is in place.

In a further effort to stimulate the real estate market, a $500 million Victorian Homebuyer Fund will also provide equity to help more Victorians reduce the cost of their home deposits.

The state’s rental market will be given a boost from 2022 through a 50 per cent land tax discount for build-to-rent developments.

The discount will last until 2040 and is expected to boost Victoria’s housing supply by about 5000 new houses and apartments.

A revamp of the planning system will include $111 million to speed up the approval of projects, including affordable housing, make the process simpler.

More planning systems will move online, with councils given support to upgrade their own digital systems.