Category Archives: Blog

THE LATEST BUDGET ANNOUNCEMENT – VICTORIANS FACE SPIKE IN LAND TAX AND STAMP DUTY BEGINNING 1 JANUARY 2022

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The Victoria pre-budget announcement came hot on the heels of the Federal Budget announcement, introducing several updates that would affect landholdings in Victoria.

The budget announcements reveal the following changes which will begin on 1 January 2022:

 

  • Land Tax

The Land Tax rate for taxable landholdings exceeding $1.8 million will increase by 0.25%, and the rate for taxable landholdings exceeding $3 million will increase by 0.30%.

 

  • Stamp Duty

Premium Stamp Duty rates for property transactions with a value above $2 million has been increased to $110,000 plus 6.5 per cent of the dutiable value in excess of $2 million.

 

  • Windfall Gains Tax

Windfall Gains Tax of up to 50% for windfalls above $500,000 will be taxed for Developers and speculators.

 

Impact of the changes

The biggest impact of the changes would be on developers and investors of property, as they would be charged more tax on acquiring or holding onto property with a high value. Treasurer Tim Pallas emphasises that everyone needs to pay their fair share to support Victoria’s economic recovery, and the budget aimed to make those who has the capacity and making substantial profits to contribute more to society.

The increases in taxes will ultimately raise an estimated $380 million each year to be reinvested into the community, giving schools, hospitals and other community services the support they need.

Although these changes which may slow down property development and divert investments away from Victoria in the recovering Covid-19 economy, the Government is showing their confidence that Victoria is still a highly attractive investment destination even with the increases in taxes.

The changes do not affect residential land and the government is still supportive of local owner occupiers will not be affected by the increases. However, Local Victorians with substantial current landholdings need to be aware if the added taxes will be applicable to them.

 

  • If you have any queries regarding property in Victoria, please do not hesitate to contact us at any time at Vincent.hui@sunlaws.com and 02 9267 4988.

THE LATEST BUDGET ANNOUNCEMENT – SUPPORT FOR SINGLE PARENT AUSTRALIANS TO PURCHASE PROPERTY!!

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In the budget announcement on 11 May 2021, the Australian government has introduced new measures to assist Australians to afford the purchase of their property.

 

The new Family Home Guarantee acts similarly to the First Home Loan Deposit Scheme where the government acts as a guarantor to single parents to allow them to purchase a property with as low as a 2% deposit! Successful applicants are also exempt from lenders mortgage insurance which usually applies to borrowers with low deposits. Over the next four years, 10,000 guarantees will be made available for the single parents to apply.

 

Who is eligible?

From 1 July 2021, the Family Home Guarantee for will be available to single parents who meet the following criteria:

  1. Australian Citizen with child dependants;
  2. Annual income of less than $125,000.00;
  3. Owner-occupier of the purchased property; and
  4. Build a new home or purchase existing home.

 

Buyer Beware!

However, applicants will also need to be aware of the following drawbacks:

  1. While being able to afford houses easier, only paying a 2% deposit on the property means that the applicants will be paying interests on a higher amount of mortgage.
  2. At the same time, applicants will need to prove that they will have the financial capabilities to afford the increased amount in order to be successful in their application.

The budget provides only a general outline of the grant, and the exact details of the guarantee may be subject to change when confirmed later on by the government.

Other announcements in the budget includes an increase in First Home Loan Deposit Scheme spots for purchases of new homes by 10,000 spots and maximum super voluntary contributions have been increased from 30000 to 50000.

We look forward to seeing the budget announced by the states to see if there are any further grants or incentive provided by the state governments.

If you have any queries regarding the above or about purchasing property in Australia, please do not hesitate to contact us at Vincent.hui@sunlaws.com or 02 92674988 at any time.

This is the latest announcement for the Homebuilder Grant – Construction deadline is now extended!

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In a surprise announcement made after the Homebuilder Grant application deadline, the Australian Government has announced an amendment to the Grant that is greatly beneficial to all parties involved.

 

The Homebuilder Grant has been hugely successful in the revitalisation of the property market during the pandemic by incentivising Australians to purchase, build or renovate their property. The amendment extends the deadline for construction to commence from 6 months to 18 months after the initial contract has been signed, which creates wide reaching benefits for all Australians such as:

 

Relieving pressure on builders

Applicants are worrying that the builders will not be able to commence construction within 6 months of the contract date according to the grant requirements. The huge influx of demand for builders added to global supply shortages due to the pandemic meant many builders faced difficulty obtaining the necessary materials and manpower to commence construction within the short time frame. Additionally, local councils were receiving much more development applications and required more time than usual for assessment and approvals.

 

 

The extension’s purpose was to ensure that existing applicants will not be denied the Grant due to circumstances outside their control according to Treasurer Josh Frydenburg. Builders now have ample time to obtain approvals and resources to confidently meet the current demand, while Applicants no longer need to worry about the construction deadline. Having an extra year to commence construction also ensures that builders will not use cheaper substitute material or cut corners to rush to begin construction. Builders can source proper materials to build giving Purchasers will have a peace of mind regarding the quality and safety of their houses.

 

Sustaining long-term economic activity

With the extension of the deadline, the Australian Government is also trying to maintain long-term economic growth rather than just a short burst of activity. Builders can organise the construction of their current projects around the extended 18 months and allocate their demand for resources over the period. This spreads out the growth of the building sector, creating more business activity and employment over the extended period.

Unfortunately, this extension DOES NOT extend the application deadline of 14 April 2021. Upon enquiry to the Revenue NSW, they have confirmed that no new applications will be accepted, and the extension only applies to existing applicants.

 

Conclusion

The Australian Government has succeeded in their goals of stimulating the building industry with the overwhelming success of the Homebuilder Grant and the amendments further relieves existing concerns regarding the building deadline. We hope to see further governmental grants and schemes to promote the economy, and please keep an eye on our articles to stay updated on any new advances. Do not hesitate to contact us at 02 9267 4988 or Vincent.hui@sunlaws.com at any time if we can assist you in any way.