How rich Victorians and overseas investors are using Allan’s stamp duty cuts for big bucks buys

They were designed to make apartments more affordable for all Victorians, but cashed-up buyers are seizing on Jacinta Allan’s stamp duty cuts, to buy up big in some of the ritziest postcodes.

Cashed-up property buyers eyeing penthouses in Toorak and Brighton are being wooed by tax savings of up to $500,000 thanks to an Allan Government housing policy supposed to boost affordability.

In October, Premier Jacinta Allan announced her government would remove a cap on stamp duty discounts for off the plan apartments, units and townhouses for 12 months, to speed up building and “make it more affordable for everyone to buy off the plan”.

But high end developers have seized on the short term policy to promote developments in the ritziest parts of Melbourne.

On South Yarra’s Domain Hill, Prime Edition is spruiking properties “from $8.395m”, with its most expensive offering eligible for a stamp duty saving of up to $360,000.

In its Como developments in Toorak Village, buyers are told they can “save up to $500,000 on stamp duty”.

Buyers are told they can “save up to $500,000 on stamp duty” at Como in Toorak. Picture: Supplied

A DCF project near to the Royal Botanic Gardens is advising clients stamp duty savings are up to $325,000, while Mirvac is promoting $225,795 off its top offerings in Parkville.

Stamp duty discounts for off-the-plan developments had been available previously but were capped for first home buyers at $750,000, and for owner-occupiers at $550,000, before the government announced its surprise 12-month free-for-all.

Opposition Leader John Pesutto said the Premier was letting down young Victorians and families by introducing a short term change “which only benefits the wealthy, those in a position to buy now, and housing projects already underway”.

“If Labor were serious about improving housing affordability, they would make meaningful and lasting cuts to their highest-in-the-nation property taxes and ensure they were properly targeted to first homebuyers,” he said.

Cashed-up property buyers are eyeing penthouses in Brighton. Picture: Getty

“Under this change, a first homebuyer purchasing a median priced house is no better off, but an overseas resident purchasing a $23m penthouse will save $1.475m – how is that fair?”

The government revealed its stamp duty discount amid a flurry of recent housing announcements, which included a plan to create 50 new activity centres around railway stations that would have radical new height limits for apartment blocks.

When it announced the stamp duty reform it promoted an example of a Victorian getting a $28,000 reduction in stamp duty if they were buying a $620,000 apartment – although Ms Allan conceded the policy was industry driven.

“We asked the industry what they need to build more homes sooner – and this is what they said,” she said.

“More apartments and townhouses getting built means more homes for young people and families to rent or buy.”

A government spokesman said “more homes means more opportunities for Victorians”.

“This is about making apartment, unit and townhouse projects more viable, so they can come online sooner and boost overall housing supply – regardless of who benefits most,” he said.

Originally published as How rich Victorians and overseas investors are using Allan’s stamp duty cuts for big bucks buys