Stamp Duty Removal In Victoria! | Melbourne Property Boom? #Finance

this is Major news and people would go on to think that maybe this could mean that Melbourne is about to be the best place to invest but I’m here to tell you to proceed with caution before you go ahead and buy one of these properties definitely keep watching hi guys my name is Ravi

and welcome back to personal Finance with Ravi shama if you’re new here smash that subscribe button because I talk about Real Estate personal

development and Financial Freedom now this is big news the Victorian government comes out and suggests hey you know what we’ve got a fantastic idea let’s scrap stamp Duty on all new homes and maybe we just apply it to new buyers no maybe we’ll apply it to everyone so let’s

Deep dive into what this actually means and I’m going to try and do this with bringing as much value to you guys because I think there’s a few things of concern but again I’m open to learning a little bit more about this now the Victorian Premiere just said the move is designed to

cut upfront costs and deliver more homes for renters and buyers across the state currently only first home buyers and owner occupiers can access stamp Duty concessions when they buy off the plan allowing construction costs to be deducted from the sale price in stamp Duty calculations these

concessions were also capped with thresholds of under $750,000 for first home buyers and $550,000 for owner occupies from Monday new concessions will be available to all of the plan buyers including foreign purchasers with the threshold removed however house and land packages or homes not part of

strata subdivisions are not eligible for the new concession so if you went out there and bought a house and land package that was just a house it wouldn’t apply to that but if you went and bought a house and land package that was part of a strata plan then you would be able to get this now

we’re going to dive into a couple of things that are a bit concerning here but let’s just give them a chance the amount saved will effectively depend on how much construction has already occurred when the property is purchased so stamp duty is calculated on the contract price minus the

constru ction costs incurred on or after the contract date so if you go and buy an existing home it’s the total value so let’s say it’s 500k you’ll pay stamp Duty on 500k but if you go out there and buy a house and land package you’ll just pay stamp Duty on the land of

course that’s lower than when the completed product is actually there now that’s one of the biggest sales tactics that people use when suggesting you should buy off the plan or you should buy house and land because you reduce how much Taxes you pay up front when it

comes to stamp Duty now although that’s true there’s a bigger concern when it comes to these new house and land packages and I’ve spoken about this in great detail so if you’re in the middle of doing it or you’re about to sign up with one of these companies that

pretend like they’re on your side and charge you nothing up front or very little you need to go check out this CashNews.co I don’t like coming out here and spreading negativity but I want to protect you guys and my thing is that these things are not good for you now something like this

in mainstream media is going to go and attract average Australians to go and do these average mistakes and these average mistakes unfortunately disadvantage so many people and is why they get stuck never being able to move forward it’s so sad and to be honest unethical when you think about

all the mechanics that go behind something like this but again let’s continue the government provided an example of a $620,000 apartment where no construction has started attracting just 4,000 in stamp Duty a $28,000 saving under the new calculation Miss Allen said the government is

responding to Industry feedback that off the plan sales have slowed and it’s been difficult to get new developments underway in the state although Miss Allen cites Interest Rates as a major contributor investor interest in the Victorian housing market has fallen off a cliff

with the government hiking land Taxes on investment properties and introducing stricter residential tency laws the new stamp juty concessions will also apply to investors we ask the industry what they need to build more homes sooner and this is what they said Miss Allen said now

who are they asking the people they’re asking are Developers okay so the developers say well we can only build homes if there’s enough of an incentive for someone to buy it which makes sense the reality is right now that many people can’t afford to buy it because they don’t

have enough cash up front or they don’t have the borrowing capacity or a combination of both so what this would do is it would effectively reduce how much you need up front to purchase a property so that seems like a win here so I’m not sure why rav’s complaining well ravi’s

complaining because you’ve just mentioned a couple of things here you’ve mentioned that it applies to investors and more importantly it also applies to foreigners so that doesn’t really make any sense cuz if you’re going out there and saying well I really want to go and

increase how many homes there are here sure by going and attracting investors you’re going to get more homes in there and maybe it’s going to lead to more rental properties which should reduce how much of an effect we have with the rental crisis that’s a positive but we

don’t really have too much pressure when it comes to the rental crisis in many areas of Victoria because there’s such an oversupply of property that doesn’t seem like the here equally a lot of the foreign buyers are just buying the property and just keeping them vacant

there’s nothing actually happening there so all this really tells me is that there’s an artificial Push by the government to say okay sure we can go and reduce the land Taxes sure we can go and change the residential tency laws but no let’s go and reduce the stamp

Duty and we’ll apply it to everyone so first home buyers want to buy their own property yeah cool you can still buy it but now we’re also introducing everyone else we’re introducing other people like investors and foreign buyers that can come in and say well now they also

don’t have to pay stamp Duty in all of this I’m seeing the biggest winner are the developers and the people that sell the crap that these developers are selling now I’m not going to generalize here and say everything that’s off the plan is crap what my pet peeve is or the

biggest issue I have with how this gets presented is what will happen is you go to one of these providers and they’ll say look you can buy this new house and land package often accountants or really crappy Brokers will suggest going and referring you to buy something like

this and what happens is they’ll say well there’s a small fee or there’s no fee at all up front and we make all of our money from a marketing fee that the developer pays us so if they’re getting paid a marketing fee you should probably ask them how much cuz I’m telling

you now that marketing fees are hell of a lot more than what you think and I know this for a fact because I get reached out by a lot of these guys and it’s happened numerous times already and that could be anywhere up to $4 to $60,000 in some cases so if you go ahead and buy say an apartment

for $600,000 if you find out that the marketing fee is $20,000 does that mean your property is actually worth what you paid minus $20,000 the developer is Happy giving someone else a marketing fee what’s worse in all of this and I get everyone needs to run a business but what’s worse is

that it’s very unethical in how it gets presented if you’re going in and saying well we actually don’t charge a fee to you we get paid by the developer it’s the same you’re still going hey you’re still going to end up paying as the client or the person going and

buying a property now although it doesn’t come in into my pocket from you directly I’ll get it from somewhere else and that just means that the property you’re buying is not actually worth what it’s worth and this is the biggest issue over the last 2 months we’ve had

so many people come back after having signed up with one of these companies and saying oh my God like this is a big mistake I’m not sure what I’m doing and I’ve just asked them those questions and I’ve realized that I’m actually going to be out of pocket by $3 or

$40,000 whereas I should probably just buy something existing and have peace of mind cuz I can go in right now now what’s really interesting is a lot of people will watch this or they’ll go and see these media headlines and say oh my God this is the best time to be buying in Melbourne

why would you be buying in Melbourne when they have an over Supply issue a lot of Markets in Australia have been booming and it’s not to do with these areas suddenly having nicer

beaches it’s because there’s a supply and demand situation going on where demand is outstripping Supply but that’s not the case in Melbourne or in areas of Victoria so if you look at this this is the chief Economist from Ray White I actually did a full podcast with Narita on my

more than money podcast Channel definitely go check it out here I’ll link it here and I’ll also link it in the description box below but she goes on to say that Victoria is possibly in a recession an additional Taxes on property owners to pay back State

Debt has made investing in property less attractive and if you look at this graph here Victoria is the worst performing when it comes to an oversupply or undersupply of housing so if you simply go well okay we’ve renewed stamp Duty now it’s the best thing to buy

you’re going to go and buy something and realize that it’s not going to move for the next 10 years because despite the fact that it takes time to approve a property and actually have a build they already have a supply problem and we’re not seeing those increased levels of demand

anytime soon so is it the right idea to be going because stamp Duty’s gone I’m going to go and buy there because now I think there’s going to be a massive boom you’ve got to also realize that a lot of people that are going to take up this cuz there will be a lot

they’re going to go and take this up and say okay well based on today’s numbers it’s looking pretty good but if this encourages more people to go buy off the plan the de developers have more of an incentive to build more which okay on one hand is great because it’s going to

go and bring more housing into the area but it’s bringing housing into an area that probably doesn’t need it anyway now even if it does and it’s in areas that maybe lack a bit of Supply right now they lack Supply but when all of these initiatives come into play and you have all of

these housing come into the market in the next 12 18 and 24 months what do you think that does when it comes to accumulating wealth with Real Estate on one side yes it’s great you’re going to have more housing but a lot of people in Australia whether they like to admit

it or not are buying property because they think it’s an asset where their money is safe and it’s going to outpace any Inflation apartments in Melbourne right now are still well below about 8 or 9% below where their highs were in 2017 if you put that into context

we’ve gone through one of the biggest booms in all of Australian history and yet we’ve got housing supply issues with an over Supply causing prices to be lower than where they were almost 8 years ago I hope you guys critically look at this and understand that not everything is equal

having stamp Duty removed isn’t automatically going to get you into a property that’s going to grow and even if you could get into a property easier is it the right choice these are the sort of things that I want you to know about and hopefully it keeps you protected from buying a dud

property I hope you guys have enjoyed this CashNews.co if you have smash that like button subscribe if you haven’t already and I’ll catch you guys in the next one thanks guys