7 BIG Changes For Victorian Real Estate

REAL ESTATE
08-Sep-2017

In 2017 there have been 7 big changes within the Victorian real estate market which could affect you as a property owner or potential purchaser. While we have included the list below, if you would like to know more or feel the changes could affect you, please contact one of our team members today.

1. First home buyers stamp duty savings

As of July 1, 2017, many Victorian first home buyers will pay no stamp duty on their property purchase if the property is under $600,000, with homes between $600,001 and $750,000 receiving partial exemptions from stamp duty.

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2. New property pricing laws 

New property pricing laws for Victorian Real Estate agents were introduced to curb underquoting. Agents must now display a statement of information for all listings, which includes three comparable sales, the median suburb selling price and an indicative selling price.

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3. No off the plan concessions for investors

Investors no longer have access to ‘off the plan’ concessions. Only buyers who are purchasing property as their principal place of residence can apply for an off the plan concession. This concession is no longer available for holiday homes, investment properties or commercial properties.

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4. Stamp duty costs when transferring an investment property

When transferring an investment property to another owner, full stamp duty applies when altering the property’s title to another name. If the property is the principal place of residence, the property may be transferred to your spouse or domestic partner within 12 months. 

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5. Vacant Residential Property Tax

While similar to federal ‘Ghost Tax’, the Vacant Residential Property Tax is a Victorian initiative to minimize the number of vacant properties within the city. Holiday houses are considered an exemption with a minimum stay of 4 weeks in a year and limited to one holiday home per owner. 

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6. Depreciation for investment properties

To be able to claim depreciation on an investment property, the property and all it’s furniture must be brand new. Also, travel costs associated with your investment property are no longer allowed to be claimed as a tax deduction. 

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7. Capitals Gains Withholding Tax and Clearance Certificates

To ensure overseas investors can no longer avoid paying capital gains tax, the ATO has implemented ‘Capital Gains Withholding Tax’ – meaning, any property transaction over $750,000 a clearance certificate must be provided by the vendor stating, that for tax purposes they are an Australian Resident or Citizen. Should the vendor not provide a valid clearance certificate, the vendor will only receive 87.5% of the property’s sale price with the purchaser paying the remaining 12.5% directly to the ATO. Foreign investors may apply for a variation notice to reduce this tax should no capital gain be made on the transaction or if the vendor will not/does not have an Australian tax liability.

Please refer to the ATO for further information on how this could affect you. 

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