May 30, 2017
What you need to know about the Federal and Victorian State budget
Investors and homeowners
- Downsizing incentive - If you are 65 or over you can make additional non-concessional contributions to your superannuation from the proceeds of the sale of your home
- Introduction of a Vacant Residential Property Tax - 1% of a property’s capital improved value on properties left unoccupied for six months or more
- Abolishment of stamp-duty spouse transfer loophole
- Option of long-term leases for landlords and tenants wanting to commit to rental arrangements for more than five year.
First home buyers
- Superannuation changes – First home buyers will be able to voluntarily contribute up to $15,000 per annum and $30,000 in total to their superannuation accounts via concessional contributions which may later be withdrawn to assist with buying their first home
- The abolishment of stamp duty for first home buyers on properties up to $600,000 and cuts to properties up to $750,000
- The doubling of the First Home Owner Grant to $20,000 in regional Victoria
- The introduction of HomesVic assistance pilot, a co-purchasing program for up to 400 first home buyers who qualify for housing loans but do not have enough deposit to buy.
- Changes to GST - Purchasers of new residential property and new subdivisions will be required to remit the GST arising from such sales directly to the ATO rather than to the developer as is presently the law
- Withholding tax increase, threshold decrease – Withholding tax increase to 12.5%, up from 10%. The threshold below which no withholding is required will decrease to $750,000, down from $2,000,000
- Main Residence Exemption removed for foreign and temporary tax residents
- “Ghost Tax” to be charged immediately to foreigners who make a new foreign investment application for Australian residential property. The tax is to apply when a residential property is not occupied or genuinely available on the rental market for at least six months per year.
If you would like to discuss how the changes may affect you as a buyer or seller of property in Victoria, please contact your local Jellis Craig office.