Victoria Extends Off-the-Plan Stamp Duty Discount

The Victorian government will slash stamp duty off-the-plan apartments and townhouses in a bid to get projects out the ground faster.

Under the plan, the current concession on stamp duty for first home buyers and owner-occupiers will be expanded.

At the moment the concession allows the deduction of construction costs from the sale price to lower the stamp duty, but it must be under $750,000 for first home buyers and $550,000 for owner-occupiers.

Those thresholds will be removed under the state plan.

It will apply from October 21, 2024 for 12 months and will allow 100 per cent of outstanding construction and refurbishment costs to be deducted. 

The government estimates an apartment buyer will save about three-quarters of the full stamp duty cost. So, for a $620,000 apartment, the duty would reduce to $4000 instead from $32,000 if the property was bought before construction starts. 

The concession extension applies to any eligible home that is part of a strata subdivision. 

House and land packages are not part of the plan, however, first home buyers and owner occupiers can still use the existing concession, which will continue beyond October 2025. 

▲ The state believes slashing stamp duty on off-the-plan apartments will put buying homes more in reach for more people.

The state said it had been toled by the industry that current interest rates had slowed sales and stopped projects proceeding.

“We asked industry what they need to build more homes sooner—and this is what they said,” Victorian premier Jacinta Allan said. 

It is hoped that with buyers’ upfront costs reduced, developers can gain more pre-sales, meet finance requirements faster and build homes sooner. 

The claim is that more projects getting to market will boost the housing supply, support the construction industry and increase housing available for rent. 

State Plots 30,000 Homes

The government also revealed plans for so-called activity centres around 50 train stations across Melbourne under plans to to deliver more than 300,000 new homes by 2051. 

So far 25 stations have been announced to have activity centres around them with a focus on Metro Tunnel stations as well as the Frankston, Sandringham, Belgrave/Lilydale and Glen Waverley train lines. 

Carnegie, Hughesdale, Murrumbeena, Oakleigh, Middle Footscray, West Footscray and Tottenham Stations have been identifies for the program as part of their connection to the Metro Tunnel project.

Hawthorn, Glenferrie, Auburn, Blackburn. Nunawading, Mitcham, Toorak, Hawksburn, Armadale, Malvern, North Brighton, Middle Brighton, Hampton, Sandringham, Tooronga, Darling, Gardiner, Glen Iris and Toorak Village have also been designated to be activity centres. 

Gardiner and Glen Iris will share a combined activity centre while Toorak Village and Middle Footscray have been designated as a smaller neighbourhood activity centre for modest growth. 

The centres will have special planning controls for their specific locations to encourage development, the state said.

High-density housing and taller buildings will be encouraged within the “core” of the activity centres, close to the stations, with building heights reduced the further from the centre sites are. 

The activity centre areas encompasses up to 800m from the train station or tram stop.

▲ Oakleigh is among the locations identified as an activity centre.

New planning controls to facilitate development will be introduced in consultation with councils and communities. 

Heritage and landscape overlays will remain as is while residents will be able to appeal against decisions and provide feedback. 

The Victorian Department of Transport and Planning recommended the locations after analysing transport capacities, access to jobs and services and environmental concerns.

Community feedback on 10 draft Activity Centre Plans emphasised the need to have public transport connections, the state said.

“Many of these communities have never had a formal plan for their future before, and this process will enhance what’s special about these suburbs while delivering more homes near transport, shops, schools, services and parks,” Victorian planning minister Sonya Kilkenny said. 

The remaining 25 centres will be announced later this year when the latest version of the Plan for Victoria is released.

The first centres will be delivered in two tranches over the next year, and planning controls for all 50 of the centres will be completed by 2026. 

There are 10 existing activity centres—Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood.

The activity centres also offer developers options to build high-density housing under planning controls that will allow taller buildings.