New apartment buyers can pocket tens of thousands of dollars in stamp duty savings, as state governments hand out discounts to boost new unit construction.
The fresh stamp duty discounts on new apartments are available to everyone rather than just first-home buyers, forgoing lucrative revenues to build more higher-density homes quickly.
The Tasmanian government is the latest to offer a stamp duty discount on new apartments and units, following a similar move by the Western Australian government late last year.
The cash savings on a new apartment purchase are massive, with Tasmanian buyers saving up to $14,468, while Western Australians can pocket up to $18,668.
Tasmanian finance minister Nic Street said the state’s new 50% stamp duty concession on new apartments and units, which passed into law on Monday, was designed to support medium-density housing.
“The concession, for buyers of a new apartment or unit off-plan or under construction, is designed to incentivise Tasmanians to take up apartment and unit living more readily, and to encourage higher density construction,” Mr Street said.
“Purchasing off-plan provides certainty for builders and developers, minimises developer risks for large-scale projects, and mitigates against unexpected cost increases for purchasers.”
There were 198 new dwellings, which includes houses and apartments, approved in Tasmania in June, up 8.8% month-on-month, according to the latest figures from the Australian Bureau of Statistics.
However, Tasmania lags way behind in home building approval numbers compared to most of the other states, with its closest competitor South Australia recording more than 1,000 approvals in the same period.
PropTrack director of economic research Cameron Kusher said the state government was hoping to drive much-needed apartment and unit construction.
“Longer term, there needs to be greater housing density there, particularly in places like Hobart and Launceston,” Mr Kusher said.
“But there’s very tough conditions to construct new housing, with high interest rates and construction costs, so it will be a challenge in delivering more stock.
“Also, you can offer these incentives but are the local governments going to be supportive and approve these higher density development applications when they come through, which in Tasmania has generally been quite a challenge, even in the centre of Hobart.”
How the discounts work
In Tasmania, any homebuyer can get a 50% stamp duty discount on the purchase of an apartment or unit that is off-the-plan or under construction worth up to $750,000.
The concession is retrospective from 1 July 2024 and will run for two years until 30 June 2026.
In WA, any homebuyer can get a full stamp duty exemption on pre-construction off-the-plan apartments and unit purchases valued at up to $650,000.
Homebuyers in the state can also get a 75% stamp duty discount on the purchase of an apartment or unit that is under construction on properties valued at up to $650,000.
There are further concessions on both types of purchases for homes worth up to $750,000.
The WA discounts are available on purchases from 31 August 2023 until 30 June 2025.
“We’re very supportive of removing stamp duty and this just highlights that governments realise that stamp duty is a big hindrance to people getting into the property market,” Mr Kusher said.
“We would be more in favour of removing stamp duty on all transactions for everyone.”
Stamp duty was found to cost almost four months’ worth of income for homebuyers in Hobart, according to last year’s Growing Burden of Stamp Duty – PropTrack Report.
Sourced from realestate.com