In a short-term boost for Victoria’s housing sector, the state government has recently announced a stamp duty concession for new apartments and townhouses purchased off-the-plan.
This temporary off-the-plan stamp duty concession aims to spur construction to address the housing shortage currently plaguing the country.
The 12-month concession allows buyers to pay stamp duty only on the land component, regardless of the property’s value. For a $620,000 apartment, this translates to a discount of up to $28,000, with just $4,000 in stamp duty owed—a significant win for those ready to dive in.
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Premier Jacinta Allan’s 12-month stamp duty concession applies to off-the-plan purchases. Crucially, this concession is universal—there’s no cap on dwelling value, making it accessible to any buyer. But here’s the catch: the incentive only lasts a mere 12 months. This has led many to question whether this incentive will actually help combat rising rental shortages.
Furthermore, according to Treasurer Tim Pallas, the concession is expected to cost the government approximately $55 million over the year.
While this is a step in the right direction, it’s quite clear that this is intended only as a short-term measure during a challenging period for the sector. Rather than seeking bandaid solutions, what we need are longer-term fixes to the problem of housing undersupply.
While the government’s push to prop up construction is commendable, a multi-faceted approach is essential for addressing the crisis at hand. And this is where property investors can really step in and make an impact.
According to the government, Australia needs to build 60,000 new homes per year to keep up with population growth. However, due to such factors as increase in construction costs, scarce labour, and available land, building activity has been in decline for some time. And it seems we’re falling further behind every year. This situation opens a unique opportunity for property investors to enter the market and help increase housing supply—while reaping the financial rewards of doing so.
Off-the-plan (OTP) investments not only stimulate construction but also contribute to addressing current rental shortages, creating an attractive opportunity for investors. By purchasing at today’s prices, investors can secure properties that will be ready in the next two to three years, when they will meet the high rental demand that is expected to continue. The added advantage of stamp duty concessions makes OTP properties an enticing opportunity for investors to take advantage of, ensuring sustained rental income and capital growth in the coming years.
The opportunity for investors in Australia’s property market is as clear as it is pressing. With government incentives on the table and an urgent need for rental properties, now is the time to act.
By investing in off-the-plan properties, you can play a direct role in addressing the rental crisis while securing a profitable and sustainable source of income for years to come.
So why wait for the government to figure it out? Be the change.
Engage with the team of experts at Ironfish to gain valuable insights and make informed investment decisions.
Let’s turn insight into action and shape the future of Australia’s property landscape together.
Want to find out how you could build your property portfolio? Our property strategists are here to help.