In the event of a change of government, Queensland may have changes coming to the stamp duty landscape, making it more accessible for first-time homebuyers to enter the property market. These updates may be a game-changer, given the continuing rise of house prices. In fact, from January 2023 to March 2024, there has been a 10.5% increase in house prices, up by 42% since January 2020, according to an NHSAC report.
Shadow Minister for Home Ownership David Janetzki’s posted that there have been substantial declines in concession rates across Ipswich, Logan, Beaudesert, and Moreton Bay over the past year and since Labor took office in 2015. For instance, Brisbane East and Redlands saw a 40% drop in the last year alone and a 75% decline since the 2014-15 financial year. According to Mr Janetzki this trend indicates that many young Queenslanders are abandoning the prospect of home ownership, suggesting that changes to stamp duty would provide much-needed relief and support to aspiring homeowners navigating the challenges of rising costs and affordability constraints.
What are stamp duty and stamp duty concessions?
Stamp duty in Queensland is a tax imposed by the state government on certain documents and transactions. It applies to various transactions, including:
- Property Transfers
- Motor Vehicle Registration and Transfers
- Insurance Policies
- Leases and Mortgages
- Hire Purchase Agreements
- Business Transfers
The amount of stamp duty you need to pay varies depending on the type and value of the transaction.
On the other hand, a stamp duty concession in Queensland is a financial relief provided by the state government to reduce the amount of transfer duty (stamp duty) payable on certain property transactions. These concessions are primarily aimed at helping specific groups, such as first home buyers, to make home ownership more affordable.
Various concessions and exemptions may be available, particularly for first home buyers and other specific circumstances.
Increased Thresholds for Exemptions and Concessions
The most notable change is the increase in the threshold for stamp duty exemptions and concessions. Previously, first home buyers were exempt from stamp duty on properties up to $500,000. This threshold has now been raised to $700,000, meaning that a first home owner will pay zero stamp duty for a house valued up to this amount. Thus, more homes are within reach without the additional financial burden of stamp duty.
Additionally, properties valued between $700,000 and $800,000 now benefit from sliding scale concessions. For example, a house valued below $800,000 can save a first home buyer up to $24,525.Therefore, first home buyers will now pay reduced stamp duty vs previous regulations, easing the process of securing financing and managing their budgets.
Support for New Builds and Land Purchases
The Queensland government has also introduced additional support measures for first home buyers, particularly those looking to build or purchase vacant land.
First Home Owner Grant
Providing crucial support to those building or buying a new home, the First Home Owner Grant, has been doubled to $30,000. Together, this change and the new stamp duty concessions offer an even greater financial relief for first-time homebuyers.
Vacant Land Concession
The first home vacant land concession threshold has increased from $250,000 to $350,000, with the concession phasing out at $500,000. This translates to savings of up to $10,675. Thus, these significant savings on land purchases make it more feasible for first home buyers build their dream home.
Timing and Eligibility
The changes to the stamp duty rules for first home buyers in Queensland will apply to contracts signed on or after June 9, 2024. If your contract was signed before this date, the earlier thresholds will still be applicable.
To qualify, you must meet several criteria.
The Importance of Stamp Duty Concessions
Stamp duty can be a significant hurdle for first-time homebuyers, often adding thousands to the initial costs of purchasing a property. By increasing the exemption threshold and providing larger concessions, the Queensland government is effectively lowering this barrier for first home buyers.
This measure not only makes home ownership more attainable but also stimulates the property market by encouraging more people to take the leap into buying their first home. It’s a beneficial situation for both aspiring homeowners and the overall economy.
Maximising the Benefits
If you’re a first home buyer in Queensland, here are some steps you can take to make the most of these changes:
- Verify your eligibility. Ensure that you meet the criteria for the first home concession, including being at least 18 years old, never having owned property, and planning to live in the home as your primary residence.
- Estimate Your Savings. To estimate how much you can save under the new rules, you may use this estimator. However, remember that this is only a guide. Seeking professional advice such as from our team is advisable to determine a more accurate stamp duty.
- Maximise Your Benefits. If you’re building a new home, be sure to apply for the First Home Owner Grant. By combining this grant with available stamp duty concessions, you can substantially lower your overall expenses, making the home-buying process more affordable and manageable. Taking advantage of these financial incentives can ease the burden of upfront costs and help you achieve home ownership sooner.
- Speak with a Property Lawyer. Seeking the assistance of an experienced Property Lawyer at Big Law can help you navigate the different grants, concessions, and eligibility requirements. We can help simplify the process by helping you understand your options, assist with the paperwork, and ensure you’re getting the best deal possible. Don’t hesitate to speak to one of our team today.
Offsetting Measures: Foreign Investor Surcharges
To offset the potential loss of revenue from the increased stamp duty concessions for first home buyers, the Queensland government has introduced additional measures targeting foreign investors.
Land Tax Surcharge
The land tax surcharge for foreign investors has been lifted from 2% to 3%. Although this rate is still lower than the 4% surcharge in New South Wales and Victoria, it is a step towards ensuring that foreign investment does not disproportionately affect the availability and affordability of housing for local buyers.
Stamp Duty Surcharge
The stamp duty surcharge for foreign buyers is now at 8%, bringing it in line with the 8% surcharge in New South Wales and Victoria. This change aims to level the playing field and ensure that foreign investors contribute more to the state’s revenue, which can then be reinvested into supporting first home buyers and other housing initiatives.
A Positive Step Forward
The Queensland government’s recent stamp duty changes are a significant and positive step forward in supporting first home buyers and making home ownership more accessible. In the event of a change of government, the increase of the exemption thresholds, may go towards addressing the challenges faced by aspiring homeowners.
Navigating these important changes in Property Law can be challenging. At Big Law, we can guide you through every stage of the home buying process. Call us now to schedule a consultation.
