Victorian State Budget provides some relief to Home Buyers
Wed, May 14 2008

The Treasurer John Lenders announced cuts to business and property taxes, extended benefits for first home buyers and a regional first home bonus for newly constructed homes, as part of the 2008 Victorian State Budget.

The Victorian Government has announced significant changes to land tax, duties on land transfers, Payroll Tax and the First Home Bonus.

First Home Bonus

The First Home Bonus will be extended to offer an additional $3000 grant to purchasers of newly constructed homes for those eligible for the First Home Bonus in regional Victoria.

Currently, a Bonus of $3000 for existing homes, or $5000 for new homes, is available across Victoria in addition to the $7000 First Home Owner Grant. The new $3000 regional bonus is additional to the existing $12,000 available for newly constructed homes valued under $500,000.

The regional Bonus is available for eligible contracts entered into on or after 6 May 2008.

Land Tax

Four significant changes to Land Tax were included in the Budget, effective from the 2009 Land Tax year. The changes are:

The tax free threshold is increased to $250,000.
Other thresholds will be adjusted by around 10%.
The top rate of Land Tax will be reduced from 2.5% to 2.25%.
A new exemption will be introduced for land occupied as long term residential accommodation for disabled persons.

Duties

The Victorian Government’s changes will result in savings on duties on land transfers, and provide further concessions for first home buyers across the State. Budget initiatives include:

Duties thresholds will be adjusted by around 10% (for duty on land transfers, Principal Place of Residence (PPR) concession, and Pensioner and Concession cardholder's concession thresholds).
For the first time those eligible for the First Home Bonus will also receive the benefits of the PPR duty concession.

A new exemption will be introduced for declarations of trust establishing special disability trusts, and for transfers of land into existing special disability trusts.

For business, the existing corporate reconstruction duty exemption has been extended to apply to restructures of stapled entities in specified circumstances.

All duty on land transfer and Bonus related measures will take effect for contracts entered into on or after 6 May 2008. The exemption for special disability trusts applies to a declaration of trust made on or after 6 May 2008, or in the case of a transfer of dutiable property, to a contract entered into on or after 6 May 2008. The corporate reconstruction exemption will apply from 1 July 2008.