This year’s Victorian budget made waves in the real estate industry, with much angst coming from those concerned about measures designed to generate billions of dollars in revenue for the state government over the years to come.

In the midst of the whirlwind of the week’s coverage, you might have missed out on the finer details of the changes, which can be important to you if you’re planning on buying a home anytime soon.

Here are some of what will (and won’t) change on July 1 and beyond.

How much stamp duty will I have to pay?

There is a bit of movement here, especially for those looking to buy a seat right in the heart of Melbourne.

At the moment, there is a stamp (or land transfer) duty exemption for residential properties up to $ 1 million introduced last year as part of coronavirus relief measures, but it needs to be liquidated.

On new residential properties, the concession is 50 percent, and for existing residential properties or vacant residential land, it is 25 percent. The measures, which took effect on November 25 last year, have not been extended and are expected to end on June 30.

This year’s budget includes special stamp duty concession measures targeting central Melbourne, with new residential properties in the city of up to $ 1 million being sold eligible for discounts ranging from 50% to 100%. These measures should last until the end of the next fiscal year.

The budget includes the extension of a concession available to people who buy homes on the plan, with the initiative extended until the end of June 2023 and its cap rising from $ 750,000 to $ 1 million.

What if I buy my first home?

Since mid-2017, targeted stamp duty concessions are granted to first-time buyers, those who buy homes under $ 600,000 are fully exempt from stamp duty, and those who buy homes up to $ 750,000 can apply for a stamp duty. partial concession.

These measures should continue.

The first-time homeowner grant also remains in place for those building new homes in Victoria, with one crucial change.

Currently, those in metropolitan areas are eligible to receive $ 10,000 and those in regional areas are eligible for an increase of $ 20,000.

These grants will still be available from July 1, but the regional grant has been cut in half and will only be $ 10,000.

How will high level property tax and stamp duty increases affect me?

The headline-grabbing measures, touted by Treasurer Tim Pallas as pushing real estate developers and investors to pay their “fair share,” have drawn a lot of attention – including strong criticism from the industry.

These measures include an increased stamp duty on real estate transactions of more than $ 2 million effective July 1, increasing the stamp duty payable to $ 110,000 plus 6.5 percent of the dutiable value beyond. of $ 2 million.

A new windfall gains tax will apply to properties whose value is increased by rezoning over $ 100,000, with a 50 percent tax on windfall gains over $ 500,000. This will come into effect from July 2022.

Different property tax increases will apply to operations valued at $ 1.8 million or $ 3 million and will take effect from calendar year 2022. Keep in mind that taxes land tenure generally does not apply if your property is your primary residence.

Adrian Lee, a real estate and real estate researcher at Deakin University, said the effect of the measures targeting the “rich end of the real estate space” was unclear.

He said research has shown there could be a localized impact, but most of the changes likely won’t affect the average person.

“If it is for the developments and they are hit with a higher tax, it is likely that they will pass that increase on to buyers,” he said.

“Either they will pass it on or they won’t develop. The tax can just reduce the margins as long as they won’t worry about developing more homes.

Will these changes cool the market?

In April, the median home price in Melbourne hit $ 1 million for the first time, and the median price in the Victoria area topped $ 500,000, and there is no indication that things are slowing down.

Dr Lee said the upward trend in house prices, as well as the displacement of people out of cities, was a global phenomenon rather than something confined to Victoria or Australia.

He said working from home, low interest rates and a lack of travel and migration led to a surge in interest in buying a property all contributed to the price hike.

“Other countries, including Canada, Hong Kong and New Zealand, have also seen rising house prices.”

Whether or not the phenomenon will continue is “the biggest question” about future real estate trends, according to Dr Lee.

He said the fact that people were investing in homes in response to working from home, rather than renting, indicated that this would be a permanent change.

“This is what people want or think will happen in the future, so maybe that is the reality given that people are really willing to put their money on the line,” he said. declared.