As the first state to throw additional stamp duty at foreign buyers, Victoria has now taken the bold move to tax properties that remain unoccupied for extended periods. They have also announced the removal of stamp duty for new home purchasers up to $600K (something they have been phasing in via discounts for a number of years).
The effectiveness of first home buyer leg ups on the affordability issue is questionable, without addressing supply and the tax on vacant properties is intended to do just that. To that end the Victorian Government also recently announced the rezoning of 100,000 new housing blocks, creating 17 new suburbs in key growth zones.
There will be much debate as to what will and won't work and only time will tell if the mixed approach has an impact on affordability. But the Victorian Government should be commended on taking action with affordability in mind. Hopefully the other states will take notice and follow suit- just like they did when Vic stuck its neck out with the Foreign Acquirer Duty.
Stamp duty will be abolished for first home buyers purchasing a property valued below $600,000, the Victorian Government says. From July discounts will also be available for property purchases between $600,000 and $750,000 on a sliding scale, regardless of whether they are new or established homes. As part of a suite of changes to make housing more affordable, the Government will also introduce a new tax levied at 1 per cent on vacant residential property to target empty properties in Melbourne's inner and middle suburbs. Owners will be encouraged to make vacant properties eligible for purchase or rent. There will be exemptions if it is a holiday house, a deceased estate or if the owner is overseas.