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A national manager for the FBAA has outlined why commercial brokers should be informed about Victoria’s stamp duty reforms.
On 1 July 2024, stamp duty for commercial properties in Victoria will be replaced with an annual property tax.
As part of the state government's Commercial and Industrial Property Tax Reform Bill, when a property is sold from 1 July, it will transition into the new system, with stamp duty being payable one final time on that property, and then - after 10 years - the Commercial and Industrial Property Tax will apply at a rate of one per cent of the property’s unimproved land value.
To fund their final stamp duty payment, eligible purchases can either pay upfront or access a transition loan provided by the Treasury Corporation of Victoria on commercial terms, should they so wish. The transition loan is limited to property values up to $30 million and used for commercial or industrial purposes. It excludes foreign purchasers and non-standard properties.
Speaking to The Adviser, Steven Ragany, national commercial and asset manager for the Finance Brokers Association of Australasia (FBAA), said that commercial brokers need to be aware of the details of these reforms, stating: “They need to be across [what’s happening] obviously for their clients. In terms of opportunities, it won’t impact them unless their clients are buying property.
“If they’re already owning, and I think this is where some people may have missed the mark, there’s no change during the transition period,” Ragany said.
“But for those who are purchasing, which is where commercial brokers come into play, they need to be across it to be able to spread the load so to speak.”
According to the Victorian state government, the commercial stamp duty reformation could support new businesses by freeing up cash flow.
The stamp duty changes in Victoria come as the South Australian government moves to abolish stamp duty for first-home buyers (FHBs) who buy or build a new home.
It will be available to all first-home buyers who buy a new home (including a house, flat, unit, townhouse or apartment), an off-the-plan apartment, a house and land package or vacant land to build a new home.
As part of the state’s upcoming 2024–25 budget, the state government will also remove property value thresholds for the stamp duty exemption and First Home Owner Grant in a bid to help bolster housing supply.
Prior to this, budding FHBs were able to access the stamp duty exemption threshold if they purchased a new home valued at $650,000 or less.
The South Australian government stated that amendments to the state’s stamp duty policy would save FHBs more than $50,000 (including the First Home Owner Grant) if they purchased a property worth $750,000.
[RELATED: Qld brokerage calls for increased stamp duty concessions]
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