Developers and builders are copping hits into the tens of thousands of dollars by covering stamp duty for their first-home buyer customers, in order to avoid a lull in the market ahead of the official tax cut later this year.
First home buyers can now save stamp duty – up to $15,000 – on a string of Victorian apartment projects and house and land packages, getting a head start on the state government’s cuts which will come into affect across the board on July 1.
It follows an announcement a fortnight ago by the Andrews government that it would waive stamp duty for all first-home buyers on properties worth up to $600,000 in the new financial year. The move will cease the current stamp duty saving offered to all off the plan purchasers, including investors.
It is understood many investor-driven developers are moving project release dates forward, in order to to capture investor dollars before the tax cut is removed.
The announcements have been met with mixed feelings by the development industry, given incentives will now fall far more heavily in favour of owner-occupier projects than investor-driven developments.
For those developers and builders who have a large portion of their projects tied to the first-home buyer segment, the July 1 commencement date presented a potential hiatus for the market. Some newly released developments saw an immediate drop in inquiries from first timers.
Porter Davis, which will pay the stamp duty for Victorian first home buyers who use the builder for land contracts, brought forward marketing plans to target first-home buyers by several months so it could ride the wave of interest generated by the announcements.