Current government grants and incentives available
There has never been a better time to make a move with various government grants and incentives available. Below is a summary of the key grants and savings that may assist you:
On 29 November 2020, the Australian Government announced an extension to the HomeBuilder program to 31 March 2021, with a number of changes to the grant amount and criteria.
A $15,000 HomeBuilder Grant is available for one of the following types of contracts entered into between 1 January 2021 and 31 March 2021 (inclusive):
- A comprehensive home building contract to build a new home as your principal place of residence where the property value (house and land) does not exceed $850,000 (inclusive of GST).
- A contract with a registered builder to substantially renovate your principal place of residence where the value is between $150,000 and $750,000 (inclusive of GST), and where the value of your existing house and land does not exceed $1.5 million. If you own a property (house and land) and demolish the house to rebuild, or your home was destroyed during the 2019-20 Victorian bushfires, these will be treated as a substantial renovation and subject to the same values.
- Note: For a demolition and rebuild to be treated under the substantial renovation category, both the demolition and rebuild must occur on or after 4 June 2020. If the demolition occurred before 4 June 2020 (i.e. the property was vacant land as at that date), a contract to build will be treated under the comprehensive home building contract category.
- A contract to purchase an off-the-plan home/new home as your principal place of residence where the contract price does not exceed $850,000 (inclusive of GST) and construction had not commenced prior to 4 June 2020.
In all cases, construction cannot have commenced before 4 June 2020.
For further information please visit https://www.sro.vic.gov.au/homebuilder-grant-guidelines
First Home Owner Grant:
A $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home.
The FHOG is $20,000 for new homes built in regional Victoria, for contracts signed from 1 July 2017 to 30 June 2021.
Your first new home can be a house, townhouse, apartment, unit or similar. The amount paid for the home, that is the contract price for construction when building the home, must be $750,000 or less.
The property must not have been previously sold as a place of residence, occupied as a home, or used for the provision of short -term accommodation, such as Airbnb. This means the first sale of a property will not be a new home if the person who built it lived in it, or leased it out or used it for short -term accommodation.
A new home can be a home that is substantially renovated, or a home built to replace demolished premises. It cannot be an investment property or a holiday house.
For further information please visit https://www.sro.vic.gov.au/fhogapply
Stamp duty savings:
The Victorian government has announced an investment of over $293 million to fund a stamp duty concession of up to 50 per cent for homes valued at up to $1 million.
The move was announced in the Victorian Budget 2020/21, which invests $1.5 billion in new tax relief for Victorian businesses and families.
This includes a stamp duty concession of up to 50 per cent* for residential homes valued at up to $1 million. It is for residential property contracts entered into from 25 November to 30 June 2021.
Prior to this announcement, first home buyers only could enjoy a full stamp duty exemption on purchases up to $600k, and reduced stamp duty on purchases up to $750k. All other home buyers however, were required to pay full stamp duty on any purchase, whether for investment or owner-occupied use.
The government’s decision to reduce stamp duty will provide a waiver of up to 50% on purchases of newly built or ‘off the plan’ residential property up to $1 million, and will apply to contracts entered into from Wednesday 25th November 2020, through until 30th June 2021.
The same saving would apply to first home buyers who purchase an existing property for owner-occupied use between $600k and $750k. They will receive a 25% first home buyer concession, as well as the newly announced 25% concession, providing them with a 50% saving on stamp duty.
A purchase of an existing property by an existing property owner, or someone who has owned a property in Victoria before, will result in a 25% waiver of stamp duty, which would equate to just under $10k on a $700k purchase.
The changes in stamp duty are expected to cost approximately $300million. Real Estate Institute of Victoria president Leah Calnan agreed the benefits would “filter across a number of property purchases, from the older generation who are wanting to downsize to first-home buyers”.
“It’s also another incentive for buyers to start looking regionally,” she said.
As you can see, there is a lot of opportunity when it comes to making a move. Our team are here to help navigate you through the buying or selling process, please feel free to contact us anytime.
By Emma Jackson - 28-Jan-2021
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