Victorian property experts have warned homeowners and buyers that they are set for one of the most complex years in the state’s housing market’s history, as major mandated changes kick in.
Victorian property experts have warned homeowners and buyers that they are set for one of the most complex years in the state’s housing market’s history, as major government-mandated changes hit home.
Here are eight market changes that have come in or are set to commence:
Land Tax – January 1, 2024
Impacting investment, commercial, and holiday home properties, from 2024 it will be applied to land valued above $50,000, instead of the $300,000 minimum in 2023.
This will cost owners $500 if their land value is $50,000-$100,000 and $975 from $100,000-$300,000. Land worth more than $300,000 will pay $975 plus 0.1 percent of the land value above $300,000.
Estimated impact: 860,000 owners (380,000 for the first time)
Cost increase on $500,000 land value: $1175
Absentee Owner Surcharge – January 1, 2024
An existing surcharge will rise from 2 percent of a property’s dutiable land value to 4 percent. It only impacts offshore owners who do not reside in Australia.
Estimated impact: 3916 transactions in the 2022-2023 financial year
Cost impact on $500,000 land value: $11,175 (including land tax increase)
Gas Substitution – January 1, 2024
Gas connections will be phased out for new home approvals, unless they are part of an estate that already has planning approval, from January 1. Gas bottle connections are still allowed. Electric appliances, typically induction cooktops and heat pump water heaters, are currently more expensive than their gas counterparts.
Estimated impact: 40,000 homes
Cost impact: $2250-$5300 (depending on quality)
National Construction Code — May 1, 2024
Homes approved for construction after May 1 will be required to be built to a seven-star energy efficiency standard under the Nationwide House Energy Rating Scheme (NatHERS). Homes will also be required to meet new liveability standards, including for accessibility to differently-abled Victorians.
Estimated impact: 50,000 homes a year
Cost impact: $30,000-$40,000 for a standard new home
Help to Buy – 2024
Co-buying scheme to support Australians who do not own a home and earn $90,000 or less as an individual ($120,000 or less for households). Approved buyers with a 2 per cent deposit co-buy with the federal government paying for up to 30 per cent of the home’s cost (40 per cent for new builds) for an equivalent stake in the home, capped at $850,000 in Victoria’s metropolitan areas and $550,000 for the rest of the state.
Estimated impact: 40,000 homebuyers (national)
Cost impact: up to $340,000 off home purchase price
Rental Bidding Ban Extension – Expected in 2024
A ban on soliciting rental bids, where tenants offer more than the advertised price, will be extended to fine agents and landlords who accept unsolicited rental bids.
Estimated impact: 624,000+ private rentals across Victoria (Census, 2021)
Fines: $11,000 (individual); $55,000 (body corporate) under current solicitation legislation
Short-stay accommodation levy – January 1, 2025
A 7.5 percent levy on income from homes listed for rent on short-stay accommodation rentals. More details will be clarified as the levy approaches its January 1, 2025, launch date.
Estimated impact: 36,000 properties
Cost impact: $750 for every $10,000 rent
Vacant Residential Land Tax – January 1, 2025
A 1 per cent land tax addition on the capital improved the value of a home deemed vacant applicable in inner and middle-ring Melbourne suburbs. In 2025 it will expand to all homes around Victoria, unless the owner lived there at least four weeks of the year — or rented it out for at least six months.
Estimated impact: 700 homes
Cost increase on $500,000 capital improved value: $5000
References:“Victoria housing market changes 2024: Eight key things set to hit the state this year” By Nathan Mawby
