Victorian home buyers are getting more time to cut their stamp duty bill on off-the-plan apartments and townhouses after the state government extended its concession in its latest budget.
The Victorian government unveiled its state budget on Tuesday, announcing a raft of cost-of-living measures, as well as fresh funding for home building and homelessness.
But the Real Estate Institute of Victoria (REIV) says the budget is a failed chance to restore much-needed confidence in Victoria’s rental market through property tax reform.
In this year’s budget, the main offering for home buyers is an extension of the temporary off-the-plan stamp duty concession until 21 April 2027, reducing duty payments by tens of thousands of dollars for eligible apartment and townhouse properties under $620,000.
It was first announced in October 2024 and was due to finish in October this year.
The off-the-plan stamp duty discount is open to everyone rather than just first-home buyers in a bid to stimulate home building across the state.
Home buyers will be able to take advantage of Victoria's temporary off-the-plan stamp duty concession until 2027. Picture: Getty
REA Group senior economist Eleanor Creagh said the move should increase potential demand for new builds.
"By broadening eligibility beyond first-home buyers to include investors, downsizers and other purchasers, the policy should help expand the potential buyer pool for new homes at a time when Melbourne’s development pipeline remains under pressure from elevated construction costs and higher financing cost as interest rates rise, which dampen project feasibility,” she said.
“While the measure should support activity, it is unlikely to fully offset the larger challenges facing the delivery of new housing".
Victorian premier Jacinta Allan has extended the temporary off-the-plan stamp duty concession until next year. Picture: NewsWire/ David Crosling
The budget is investing $860 million to help deliver more than 7,000 social housing homes over the next 10 years, as well as $47 million to help people leave homelessness.
Victorian housing and building minister Nick Staikos said the funding would help improve housing quality and safety for residents across the state.
“Every Victorian deserves the dignity that comes with a home that is comfortable and safe,” Mr Staikos said.
REA Group senior economist Eleanor Creagh says the extension should increase potential demand for new builds. Picture: Supplied
“That’s why we are making these important investments in this budget.”
For home building, the budget had $23.7 million for its planning reforms, $15.6 million over four years to unlock land for new greenfield housing, and more than $50 million to expand the Building and Plumbing Commission.
But REIV chief executive Toby Balazs has called for more evenly balanced tax and regulatory settings to ensure a healthier rental market ecosystem.
“Ironically, the relentless 10-year period of rental regulation and property tax increases we have seen play out in Victoria has served to increase complexity and holding costs for rental providers, while failing to materially improve rental affordability and access,” Mr Balazs said.
“We’re pleased that the Government has heeded our member-informed concerns, and refrained from using this budget to add to the already heavy tax and regulatory burden on the state’s rental providers.
“Having said that, what amounts to another status quo budget for Victoria’s property sector won’t succeed in breathing life into a flat-lining rental market.”
REIV chief executive Toby Balazs has called for more evenly balanced tax and regulatory settings to ensure a healthier rental market ecosystem. Picture: Supplied
A recent REIV survey found that 56% of Victorian rental providers would either reduce the size of their property portfolio, sell and change their investment strategy, or sell and buy interstate if the current tax and regulatory conditions for rental providers do not change.
Victoria is said to have the highest property taxes in Australia following a number of tax hikes and new temporary levies introduced in recent years.
While the budget is promising a $1 billion operating surplus in 2026-27 - without capital works factored-in - the state’s debt is forecast to grow to $175.6 billion in 2026-27, up from $165.3 billion this year.
Victorian opposition leader Jess Wilson said the state budget failed the basic test.
“It spends big, plans little, and leaves the next generation to pick up the bill,” she said.
"You can't run a household like this, and you certainly can't run a state. The enormous and growing interest bill is making life harder for every Victorian - we cannot continue on this path.”
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