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State Budget offers big stamp duty cuts for homes under $1 million

27 November 2020

The Victorian State Budget will offer big stamp duty discounts for home buyers spending less than $1 million.

Treasurer Tim Pallas says stamp duty will be halved for new homes and cut by 25 per cent for existing homes as of now through to June 2021.

It’s a huge bonus for homebuyers who will be tens of thousands of dollars better off and it will allow plenty of hopefuls to buy sooner.

The slashed tax is designed to get things going again in the state’s housing market after it copped a COVID lockdown battering.

There are fears however, the move could drive up house prices, like those coming from Grattan Institute’s Brendan Coates.

“It will support some construction particularly for new homes but it’s not going to help affordability at all,” Mr Coates told Domain.

“There will be greater competition for those homes that fall under the stamp duty concession and it will push up prices.”

Phillip Webb Real Estate chief executive Anthony Webb said it was heating up demand for homes around the $800,000 mark and would naturally see a drop-off in demand for homes worth just over $1 million.

“It could also create a hard line around the $1 million price because who would pay $1,000,001 if it’s going to cost them another $15,000?,” he told Domain.

“This could incentivise people wanting to downsize. Those in a house priced over $1 million can step down to a unit without having to pay more,” Mr Webb said.

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