New home buyers can reap big stamp duty savings at a Melbourne apartment project, as developers look at inventive ways to attract buyers at a time when affordability is front of mind.
All home buyers in Victoria can already get a stamp duty discount on off-the-plan and under-construction apartment and townhouse purchases, however the concession shrinks as construction progresses.
Property group Mirvac is stepping in to subsidise stamp duty savings for home buyers purchasing an apartment at their Prince and Parade project in the inner-north suburb of Brunswick.
The $300 million project started construction in 2023, and the 169-apartment development is scheduled for completion in August this year.
Mark Trovato, Mirvac’s development director for apartments in Victoria, said about 60% of the project has been sold – a positive result considering they took a leap of faith by starting construction before reaching a typical pre-sales threshold.
He said their stamp duty discount offer has been well received by buyers.
“There are stamp duty savings available through the government subsidy, but as construction progresses, that subsidy reduces as your dutiable value increases,” Mr Trovato said.
An artist's impression of the Prince and Parade project in Brunswick, Melbourne. Picture: Supplied
“Mirvac understands that that is a pain point for our buyers, and in order for us to differentiate ourselves and remain competitive as an off-the-plan proposition, we look to make up the balance of what the government isn't subsidising, and our current campaign is effectively stamp duty savings throughout all of our product types available.”
Stamp duty is a massive cost for home buyers around the country, and a significant revenue raiser for state governments.
A homeowner looking to upgrade or downsize can expect to pay about $46,000 in stamp duty alone to buy a median-priced established home in Melbourne today, according to Victoria’s state revenue office.
Stamp duty discounts are often provided to first-home buyers, but economists say the property tax, in addition to other moving costs, can prevent households that are looking to upgrade or downsize into a home that suits their needs from making the move.
The $300 million project started construction in 2023. Picture: Supplied
PropTrack senior economist Angus Moore said homebuyers in Melbourne needed to spend half a year’s worth of full-time income on stamp duty, a burden that has increased enormously compared to a generation ago.
“Stamp duty is very costly,” he said. “Stamp duty is an inefficient tax because it discourages people from moving to homes that suit them.”
Mirvac offers the stamp duty rebate at settlement rather than a discount upfront, which can be particularly helpful for downsizers and owner-occupiers.
It comes as housing affordability weighs more and more on home buyers around the country, with Australia’s median home price near record highs.
The 169-apartment development is scheduled for completion in August this year. Picture: Supplied
Economists say the key to fixing housing affordability is through building more homes and increasing housing supply, however Australia’s home building industry has struggled in the years since the start of the pandemic.
Home building activity has been improving since last year, however there are concerns that the recent interest rate hikes, the war in the Middle East, and the recent property tax changes in the federal budget may derail that momentum.
"Affordability is important generally to ensure we have a client base that has the means to buy into our project,” Mr Trovato said.
“We have a variety of apartment sizes and that’s how we bridge the gap between premium [apartments] while also accommodating students, doctors, nurses, and other people who are working in this precinct.”
The project has one-bedroom apartments starting around the mid-to-high $500,000 range through to spacious residences overlooking Princes Park that are selling for millions of dollars.
The campus-style project is located close to the University of Melbourne and the Royal Melbourne Hospital precinct, and comes with a residential lounge, shared dining room and kitchen, library, gym, concierge service, crown courtyard and a shared rooftop terrace.
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