The Victorian State Government introduced a discount on stamp duty late last year to provide stimulus to the local property market. It’s probably safe to say that it worked.
The Victorian stamp duty savings which currently apply are as follows:
- Buyers of newly built or off the plan homes save 50% of their stamp duty costs
- Buyers of established properties can save 25% of their stamp duty costs
- The property must be valued at $1,000,000 or less
First Home Buyer’s benefit most of all, as they are entitled to receive the first home buyer stamp duty waiver up to $600,000 and then from $601,000 to under $999,999 are potentially eligible to receive the additional stamp duty discount. The Victorian stamp duty discount is set to end on 30 June 2021.
Backdating contract dates
Amending contract dates (i.e. back dating contracts to get the discount) is not on!
The SRO considers this to be fraud (it is fraud – let’s call a spade a spade) and the SRO is able to issue and enforce fines of up to $99,000 each for the purchaser, vendors and their representatives if fraud is proven.
Buyers must ensure that they are signing their contract within the eligible time frames and must not attempt to amend or re-sign a contract fraudulently.
Your finance approval may be affected
Another implication is if you have a finance pre-approval in place which includes the stamp duty discount. On a purchase of $800,000, you’re looking at a discount of $10,767.50 if you aren’t a first home buyer. Without the discount you would be required to cover this shortfall of $10.76750 and it can’t be capitalised onto your loan.
If you are currently pre-approved and concerned that you won’t be able to purchase by the June 30 deadline, it’s important you speak to your finance broker and legal representative now. Ask your broker to review your pre-approval and funding position. This is to ensure you have enough funds to cover costs meaning you won’t be faced with a shortfall when settlement day arrives.
If you have questions about stamp duty and what discounts may be available to you get in touch. Entourage Legal can provide detailed advice on all aspects of property law and the Entourage Finance team are on hand to help you understand your borrowing power.