The Victorian State Government released its Budget this week and as expected they have introduced a tax for properties left unoccupied for six months or more.
It was one of a host of changes to the property market, with property investors the hardest hit.
The tax will raise around $80 million for the State in the next four years and comes in on January 1 next year for properties vacant this year.
Properties have to vacant for six months in a calendar year to attract the tax, and will be slugged at 1 per cent of the property’s capital improved value.
Deceased estates, renovations and holiday homes are exempt from the vacant property tax.
As the Government announced earlier in the year, stamp duty will be abolished for first-home buyers on properties under $600,000 and reductions for those under $750,000 to help with housing affordability.
On the other end of the scale the Government is removing the off-the-plan stamp duty concessions for investors and is also closing the loophole for spouses who transfer investment properties to each other to avoid tax.
The key points from the Budget for the real estate industry are below.
Stamp duty abolished for first-home buyers on properties worth less than $600,000 and reductions for properties less than $750,000.
First Home Owner Grant of $20,000 doubled in regional Victoria.
New HomeVic assistance pilot program for up to 400 first-home buyers who qualify for housing loans but do not have enough deposit.
Long-term lease options for landlords and tenants wanting to commit to rental arrangements over five years and a website to help them connect.
Ten new frontline specialist staff to help tenants with assistance.
Introduction of Vacant Residential Property Tax for properties left unoccupied for six months or more in a calendar year.
Stamp duty loophole for spouses who transfer investment properties to each other.
Land tax to be calculated annually instead of bi-annually for 2019.