‘The Labor government is giving millions of dollars of tax handouts to the ultra wealthy to buy penthouse apartments in the middle of a housing crisis,’ Greens Leader Ellen Sandell says

The Allan government’s off-the-plan stamp duty concession scheme is under fire after it emerged it was helping cashed up buyers save more than $300,000 in tax.

The Greens want to limit concessions to off-the-plan apartments and townhouses worth up to $1.6 million. Picture: Getty

Victoria’s housing minister has defended handing cashed-up buyers of luxury homes tax discounts as she rejected a new push to cap off-the-plan stamp duty concessions.

Harriet Shing was quick to shut down the Greens as the minor party launched a bid to limit the popular concessions to off-the-plan apartments and townhouses worth up to $1.6 million.

Currently, the stamp-duty concession is uncapped and available to any buyer, meaning those purchasing luxury properties can escape paying hundreds of thousands of dollars in tax.

One buyer of a ritzy penthouse apartment in Fitzroy, which sold for $10 million in February, would have saved about $300,000 in stamp duty due to the discount.

Victoria’s housing minister Harriet Shing has defended the concessions for high-end buyers. Picture: NewsWire/Ian Currie

The Herald Sun also revealed in December that luxury apartment developers were wooing property buyers eyeing penthouses in Toorak and Brighton by promoting tax savings of up to $500,000.

Greens Leader Ellen Sandell said capping the concession would ensure that first home buyers and young families could buy a family home while blocking the “ultra wealthy” from tax handouts.

“In one case, we saw a $20 million luxury penthouse in Armadale sold to a purchaser who paid zero in stamp duty,” she said.

“We’ve seen a $10 million apartment in Fitzroy where the purchaser paid zero in stamp duty.

“This is rife right across our city, and it’s because the Labor government is giving millions of dollars of tax handouts to the ultra wealthy to buy penthouse apartments in the middle of a housing crisis.”

Ms Shing, however, defended providing tax relief to those purchasing high-end homes, saying the government was delivering housing support “for a range of different consumers”.

“When you look at the median house price in Melbourne and the way in which house prices have changed again, we are seeing that people are looking to buy first homes for themselves in the range … beyond $600,000 beyond $750,000 and in those growth areas,” she said.

“Building an apartment, a unit or a townhouse to which this off the plan exemption would apply is something which will often come with that sort of price tag.”

Premier Jacinta Allan also ruled out capping the concessions.

The buyer of a $10 million Fitzroy penthouse was eligible for tax concessions.

Managing Director of DOW Real Estate Taylor Dow, who sold the flashy $10 million Fitzroy pad, said Victoria “urgently needs stimulus in the off-the-plan sector” to help get projects off the ground and make purchasing more affordable “across all markets”.

“With construction costs continuing to rise, the incentive to save on stamp duty is more important than ever,” he said.

Property Council Victorian executive director Cath Evans said capping the concessions would “likely shake the confidence” of developers during an already difficult time.

“These concessions incentivise off the plan sales which help to directly overcome the feasibility hurdle for new housing projects, which is what Victoria urgently needs,” she said.

In last month’s budget, $61 million was allocated to expanding the concessions which came into play in October for another 12 months, saving homebuyers an average of $25,000.

The amount saved depends on how much construction has occurred, allowing for a 100 per cent deduction of outstanding construction and refurbishment costs when calculating how much stamp duty is owed.

Under the concession, someone buying an apartment off-the-plan is generally able to cut their stamp duty by about 75 per cent.

Originally published as ‘The Labor government is giving millions of dollars of tax handouts to the ultra wealthy to buy penthouse apartments in the middle of a housing crisis,’ Greens Leader Ellen Sandell says