In an effort to battle the issue of housing affordability, the Victorian Premier Daniel Andrews has announced reforms aimed at helping first home buyers. From 1st July 2017, the Victorian government will abolish stamp duty for first-home owners.
What exactly is stamp duty?
Stamp duty is a tax paid on written documents and several types of transactions including motor vehicle registration, insurance policies, and transfers of property (including real estate). This tax operates at the State and Territory level, meaning that home-buyers in different parts of the country will pay varying amounts of stamp duty on similarly priced property transactions.
What does it mean for first home buyers?
This is one of the most significant changes made in the recent discussions on housing affordability.
Online stamp duty calculators estimate that a first home-buyer in Victoria would pay $17,145 in stamp duty for a property worth $600,000. Removing this tax for first home-buyers is a significant change.
What does it mean for Kyneton?
As someone who has been in the real estate game for many years, I understand that many first home-buyers are not seeking a mansion. Many of them are looking for the first step into an elusive market. They want a roof over their heads and an opportunity to have a future for themselves.
One of the issues raised when the reforms were announced was that the reduction in stamp duty could drive up the housing costs. What we might see is more owner-occupiers having the opportunity to buy their own home and less investors purchasing. The issue of limited supply in some areas might impact on the rental market but the initiative favours who it is intended to – first home-buyers and those that sell their homes.
With a number of new developments in Kyneton in the works, it looks like this incentive will only benefit the community and the people who want to live in it.