Victoria’s Peak Real Estate Group has warned that drastic property tax reforms could come back to annoy the state government in the next election.
A 0.25% increase in land taxes on real estate worth more than $ 1.8 million is expected to generate $ 1.5 billion for the Treasury.
Tweaks will also see buyers spending more than $ 2 million on their homes paying 6.5% stamp duty instead of 5.5%, the government charges half of the money earned from land repartitioned sales , Promotes an increase in profits of over $ 500,000.
Market experts have already seen signs that buyers seeking homes over $ 2 million are in a hurry to overcome the stamp duty hike that begins on July 1.
Leah Karnan, chairman of the Victoria Real Estate Institute, warned that federal workers have already learned tough lessons about unfavorable policy moves related to real estate.
“We are considering our position and discussing with opposition parties and crossbenchers,” Karnan said.
“As we saw in the last federal election, when the government created a policy that had a negative impact on the real estate market, it was not well accepted.”
She mentioned Bill Shorten’s disastrous 2019 election campaign. It called on his grandfather for negative gearing tax incentives for real estate investors.
Melbourne’s commercial and housing sector was still “decimated” from COVID-19, but taxes make the state less widely attractive to interstate immigrants and investments.
“If the state government continues to add taxes to the real estate sector, Victoria will become less attractive for people to invest,” Karnan said.
Buyer supporter Emily Wallace said, “There may be short-term hype on investment property as people try to get in before the stamp duty hike is imposed.”
“This announcement could cause a bit of horror to people in the coming weeks and will definitely knock out a few people, including mom and dad investors trying to prepare for retirement,” Wallace said. He said.
This seemed to be the case as Brighton’s 62 William Street went under the hammer yesterday.
The property was put on the market for $ 2 million, but bidders maintained $ 2.47 million.
Wallace said Saturday’s announcement by the government “could definitely have influenced the outcome.”
“For such properties, increasing stamp duty and land tax will make a big difference,” Wallace said.
Beginning July 1, buyers who spend $ 2.47 million will pay an additional $ 24,700 in stamp duty compared to previous buyers.
At 49 Broughton Road in Surrey Hills, bidders pushed a four-bedroom home to the market for $ 1,975,000, a whopping $ 2,368,000.
However, Jeris Craig’s distributor, Adele Mirabella, did not believe that buyers were motivated by the imminent increase in stamp duty.
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