How Changes in ‘Off The Plan’ Concession Affected Real Estate in Victoria and a Solution to it
Investing in real estate or buying a residential property is a great way of expanding one’s wealth and assets. With so many different ways of growing one’s wealth by investing in real estate in Victoria, it is essential to make an informed and smart decision so as to maximize the return in this profitable sector. However, if one is a novice to this market and is unaware of its dynamics and intricacies, it is crucial, to begin with, the off the planned law established by the Victorian Law on July 2017 which had a huge impact on the real estate scene in Victoria. Here is detailed information on off the plan property and concession and how to avoid its common pitfalls.
What is off-the-plan property and concession?
The term ‘off-plan’ property refers to any land or property which is available for purchase even before its construction has commenced. This is where buying ‘off-the-plan’ comes from, and it typically refers to the purchase of apartments. Off-plan property is favourable for real estate investors who purchase the vacant land to make lucrative profits later on by selling it to a rising market. Until now, the buyers of off-the-plan real estate in Victoria were required to pay stamp duty on the existing land value during purchase and any construction carried out so far. Constructions or refurbishments made after the contract date was disregarded as a concession to stamp duty for the purchase.
What are the amendments in the new law regarding off-the-plan concession?
As of July 1, 2017, the changes in the off-the-plan concession came into effect. According to this law, which is subject to the State Taxation Acts Amendment Bill 2017 passed by the Parliament, purchases of any real estate property not yet constructed will not be entitled to a concession in stamp duty unless they are.
What is off-the-plan property and concession?
The term ‘off-plan’ property refers to any land or property which is available for purchase even before its construction has commenced. This is where buying ‘off-the-plan’ comes from, and it typically refers to the purchase of apartments. Off-plan property is favourable for real estate investors who purchase the vacant land to make lucrative profits later on by selling it to a rising market. Until now, the buyers of off-the-plan real estate in Victoria were required to pay stamp duty on the existing land value during purchase and any construction carried out so far. Constructions or refurbishments made after the contract date was disregarded as a concession to stamp duty for the purchase.
What are the amendments in the new law regarding off-the-plan concession?
As of July 1, 2017, the changes in the off-the-plan concession came into effect. According to this law, which is subject to the State Taxation Acts Amendment Bill 2017 passed by the Parliament, purchases of any real estate property not yet constructed will not be entitled to a concession in stamp duty unless they are.
- First home buyers, with a dutiable value of property not exceeding $750,000 (first homeowner grant).
- Buyers who intend to use the property as a permanent place of residence with dutiable property not exceeding $550,000.
Investors buying an investment property, home buyers whose property's dutiable value exceeds the threshold value, as well as foreign buyers who are subject to an additional 7% surcharge on top of the stamp duty, are all affected by this law.
Hence, keeping in mind these sudden changes in real estate, first home buyers and investors must hire a real estate lawyer in Victoria for proper legal and financial advice. Finding a good and credible real estate lawyer in Victoria can be a daunting task if one is new in the real estate scene. There are many online websites which provide sound real estate investment advice in Victoria, such as Clarity Online. Clarity Online has an expert panel of property lawyers, consultants, and solicitors, who dispense affordable and comprehensive legal advice, suitable to one's investment plans. With their efficient and proactive Advice Centre, one just needs to upload the contract documents for the team to go through and point out any anomalies in the clauses. In order to make a successful deal and fruitful investment, one mustn’t hesitate to receive professional real estate investment advice before sealing the deal.
