Another high volume auction weekend with 978 auctions reported to the REIV achieving a clearance rate of 82%. 806 sold at auction, 172 passed in and there were an additional 159 private sales.
Over the weekend, the Victorian Treasurer Tim Pallas announced that stamp duty on property and land taxes will rise effective from the 1st of July as part of the this week’s state budget.
The new changes will include an increase in stamp duty for purchases over $2,000,000 which will include the normal $110,000 payable upto $2,000,000 and then changing to 6.5% over $2,000,000. On a $3,000,000 purchase the stamp duty will now be $175,000 which is an increase of $10,000. Whilst a lot of money, probably not enough of an increase to stop buyers from purchasing at the higher end.
Land tax is also proposed to be increased by 0.25% for taxable land holdings from $1,800,000 to $3,000,000 and 0.30% for taxable land holdings above $3,000,000. If you have taxable land holdings (and this does not include your Principal Place of Residence) of $3,000,000, the current rate of land tax is $24,975 and the new proposed amount would be $27,975 which is an increase of $3,000 per year.
Whilst these increases are designed to target higher income earners, I don’t believe it will be enough to stop an owner occupier buying their ideal home but it may impact the amount of properties an investor purchases in Victoria. That being said, the majority of property investors only hold one or two investment properties at any one time.
Developers and investors owning properties that are rezoned are also being targeted with a 50% tax if the gain is over $500,0000.
Despite the freezing conditions, the weekend’s auctions were active and open for inspections were busy. Some even reporting lines up down the road, quite a feat considering the arctic blast Melbourne was experiencing.
1/3 Wilkins Avenue, Beaumaris – last sold for $552,500 in 2012 went under the hammer over the weekend with three bidders participating in the auction. The property was announced on the market at $1,050,0000 and sold for $1,115,000.
17 Capulet Street, Moonee Ponds was popular with families producing 4 bidders at the auction. The property was quoted $1,425,000 to $1,525,000 but sold well above this under the hammer for $1,705,000.
2/1163 Dandenong Road, Malvern East achieved a surprising result for a main road location. Villa units in quality suburbs are in high demand and this three bedroom, one bathroom property was no exception, 6 bidders in total property achieving a result 25% above the top of the quoted range of $1,093,000.
Have a great week.