Why it makes sense to buy in Victoria
With a median house price over $1 million, Sydney is Australia’s most expensive city to live in. It doesn’t help that first home buyers are being priced out of the market and face strong competition from foreign investors and home buyers with built up equity in their existing properties.
The recent stamp duty changes for first home buyers in New South Wales (more information is found here) have also been extended to Victoria, and together with a $10k increase to the First Home Owner’s Grant, it is no wonder that many first home buyers are looking beyond Sydney to secure their piece of the Australian Dream. It also helps that Melbourne has a median house price that is approximately $250k less than that of Sydney.
What stamp duty savings are available?
From 1 July 2017, there will be no stamp duty payable on the purchase of a home with a purchase price or dutiable value under $600k for first home buyers purchasing a property to live in. Based on information received from the Real Estate Institute of Victoria, the median price of a unit within the metropolitan Melbourne area, Inner and Outer areas is under $600k.
There is are also stamp duty concessions available for purchases of Property up to $750k. This means on the purchase of a Property with a purchase price of $700k, there is a stamp duty saving of approximately $12.4k.
The exemption and concessions apply to the purchase of both new and existing property. The removal of the application of the stamp duty exemption and concessions on just new properties means that there are a lot more eligible properties on the market, and waiting times are reduced as first home buyers no longer need to wait for the construction of the property. They can move in straight away once the settlement has occurred, usually within 6 weeks of signing the Contract.
Increase your offer by $10k
The First Home Owner’s Grant (“FHOG”) is a payment of $10k available to eligible first home buyers who either:
- Purchase a property with a purchase price of up to $750k;
- Purchase an existing property which has never been lived in;
- Purchase a block of land on which you will build your home; or
- Purchase a house and land package for which the total value does not exceed $750k.
However, the Victorian State Government is willing to double the grant under FHOG to $20k for first home buyers who purchase property in regional Victoria. What constitutes regional Victoria is determined by which municipality the property comes under. A list of the municipal councils considered to be “regional” for the purposes of the FHOG may be accessed through this link here.