The Victorian government’s introduction of a major stamp duty reduction for off-the-plan apartments, units and townhouses is set to stimulate the market over the next year. For contracts entered on or after 21 October 2024 and before 21 October 2025, the purchaser can deduct the construction costs incurred on or after the contract date when determining the dutiable value of the property, significantly reducing expenses for eligible buyers.
Previously, the off-the-plan concession was restricted to first-home buyers and owner-occupiers within specific price thresholds. Now, all buyers of eligible properties, including foreign investors, can benefit, encouraging activity across a wide range of price points, particularly at the top end of the market. Savings vary based on construction progress: buyers of properties with unstarted building work will maximise the concession they receive, while those purchasing partially completed properties will benefit proportionally.
Kay & Burton Executive Director Peter Kudelka sees this as a timely boost for the market. “This is a great initiative by the government that will certainly stimulate that sector of the market,” Mr Kudelka says. “We’re already seeing a marked increase in enquiries from both local and international purchasers, particularly with no price limit on eligible properties. For high-end, luxury apartments, the potential savings are quite substantial.”
Kay & Burton Projects anticipates that savvy purchasers will seize this opportunity, with potential savings of up to $850,000 on select developments. At Como Toorak by Prime Edition, a prestigious collection of fifteen residences and two oversized penthouses designed by Jolson and landscape designer Paul Bangay, the developer estimates savings on stamp duty between $126,000 and $717,000, as the project nears 35 per cent completion*. Meanwhile, Tintern Toorak, another Prime Edition project featuring three whole-floor apartments, offers buyers the chance to potentially save between $500,000 and $850,000 if purchased prior to construction, according to the developer.
Orchard Piper’s Toorak Village residences are another opportunity where buyers can secure stamp duty reductions thanks to the concession. Currently being built, the boutique project—which secured record sales rates for the sub-penthouses and penthouses—is expected to be complete by spring 2025.
Despite the promising policy change, Kudelka notes that developers are still navigating significant challenges. “There are definite green shoots, but developers continue to grapple with high construction costs, rising taxes, and supply chain issues. The private sector is being relied upon to deliver more homes at all levels of the market.”
However, he is hopeful the short-term policy shift could have wide-reaching implications for Victoria’s housing market and attract a broader range of buyers into the off-the-plan sector. “This added incentive could be transformative for the market from now until October 2025, providing real opportunity, particularly for those looking to secure high-quality off-the-plan properties,” Mr Kudelka said.
For more information about the off-the-plan duty concession, please visit sro.vic.gov.au/land-transfer-duty/temporary-plan-duty-concession
*At the time of publication.
All images are artist interpretation.
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