Key Takeaways

The Victorian Government, on 24 November 2020, delivered the 2020/21 Victorian Budget which had been postponed due to the impact of COVID-19. Treasurer, Tim Pallas, presented a budget which is aimed at repairing and recovering the Victorian economy.

The budget includes $1.5 billion in tax reliefs for Victorians including substantial stamp duty concessions for residential transactions and regional commercial transactions, in the hope of stimulating the housing market and supporting regional economies.

Budget – Stamp duty waivers

Treasurer Pallas announced the following stamp duty waivers:

• There will be a 50 per cent stamp duty concession on the purchase of commercial and industrial properties in regional Victoria from 1 January 2021. This concession was originally meant to be implemented from 1 July 2023, but has now been brought forward.
• There will be a waiver of 50 per cent for the purchase of newly built or off-the-plan properties for transactions of up to $1 million for contracts entered between 25 November 2020 and 30 June 2021.
• There will be a waiver of 25 per cent for the purchase of existing residential properties for transactions up to $1 million for contracts entered between 25 November 2020 and 30 June 2021.

Implications

Treasurer Pallas said the stamp duty waivers are being introduced to encourage Victorians back into the housing market and to lure businesses to regional Victoria to rebuild the hard hit regional economies.

These measures will likely encourage first homebuyers to enter the housing market. It is worth noting that the residential stamp duty waivers are not reserved for owner-occupiers or first home buyers, therefore, investors will benefit and will likely also come back into the market.

Although it remains to be seen whether businesses will relocate to regional areas of Victoria, with the assistance of these measures, doing so will likely improve employment rates in such areas.