• Fri. Feb 23rd, 2024

    Victorian Housing Market Faces Major Changes in 2024

    BySharna Bass

    Jan 20, 2024
    Victorian Housing Market Faces Major Changes in 2024

    The housing market in Victoria is set to experience significant changes in 2024, presenting homeowners and buyers with a complex year ahead. These changes, mandated by the government, will have far-reaching effects on various aspects of the real estate market. Here are some of the key changes to expect:

    1. Land Tax: Starting from January 1, 2024, the land tax will be applied to properties valued above $50,000, rather than the previous minimum of $300,000. This change will impact investment, commercial, and holiday home properties, affecting approximately 860,000 owners.

    2. Absentee Owner Surcharge: The surcharge for offshore owners who do not reside in Australia will double from 2% to 4% of the property’s dutiable land value. This change is expected to influence approximately 3,916 transactions in the upcoming financial year.

    3. Gas Substitution: As of January 1, 2024, gas connections will be phased out for new home approvals in favor of electric appliances. Induction cooktops and heat pump water heaters will replace gas counterparts, although this change may result in additional costs ranging from $2,250 to $5,300, depending on the quality of the appliances.

    4. National Construction Code: Homes approved for construction after May 1, 2024, will be required to meet a seven-star energy efficiency standard under the Nationwide House Energy Rating Scheme (NatHERS). This new code will also include liveability standards, ensuring accessibility for differently-abled Victorians. Building to these standards may increase the cost of a standard new home by $30,000 to $40,000.

    5. Help to Buy Scheme: In 2024, the government plans to introduce a co-buying scheme to assist Australians who do not currently own a home. Eligible buyers with a 2% deposit can partner with the federal government, which will contribute up to 30% (40% for new builds) of the home’s cost. This initiative aims to provide up to $340,000 off the purchase price for around 40,000 homebuyers nationally.

    These changes, among others, signify a major shift in the Victorian housing landscape. Homeowners and buyers need to be prepared for the potential financial impacts and adjust their plans accordingly. It is vital to stay informed and adapt to the evolving market conditions in order to navigate these changes effectively.

    FAQ:

    1. What is the new land tax rule in Victoria?
    Starting from January 1, 2024, the land tax will be applied to properties valued above $50,000, instead of the previous minimum of $300,000.

    2. Who will be affected by the changes in land tax?
    This change will impact investment, commercial, and holiday home properties, affecting approximately 860,000 owners.

    3. What is the absentee owner surcharge?
    The surcharge for offshore owners who do not reside in Australia will double from 2% to 4% of the property’s dutiable land value.

    4. How many transactions are expected to be influenced by the absentee owner surcharge?
    It is expected to influence approximately 3,916 transactions in the upcoming financial year.

    5. What is the plan regarding gas connections for new homes in Victoria?
    As of January 1, 2024, gas connections will be phased out for new home approvals, and electric appliances such as induction cooktops and heat pump water heaters will replace gas counterparts.

    6. What additional costs may be incurred due to the gas substitution policy?
    The change to electric appliances may result in additional costs ranging from $2,250 to $5,300, depending on the quality of the appliances.

    7. What is the new energy efficiency standard for homes approved for construction after May 1, 2024?
    Homes approved for construction after May 1, 2024, will be required to meet a seven-star energy efficiency standard under the Nationwide House Energy Rating Scheme (NatHERS).

    8. What other standards will be included in the new National Construction Code?
    The new code will also include liveability standards, ensuring accessibility for differently-abled Victorians.

    9. How much may the cost of a standard new home increase due to the new construction code?
    Building to the new energy efficiency and liveability standards may increase the cost of a standard new home by $30,000 to $40,000.

    10. What is the Help to Buy Scheme?
    In 2024, the government plans to introduce a co-buying scheme to assist Australians who do not currently own a home. Eligible buyers with a 2% deposit can partner with the federal government, which will contribute up to 30% (40% for new builds) of the home’s cost.

    11. How much could eligible buyers save through the Help to Buy Scheme?
    This initiative aims to provide up to $340,000 off the purchase price for around 40,000 homebuyers nationally.

    Definitions:
    – Land Tax: A tax imposed on the value of land or unimproved property.
    – Absentee Owner Surcharge: A surcharge imposed on offshore property owners who do not live in the country.
    – Gas Substitution: The replacement of gas connections in homes with electric appliances such as induction cooktops and heat pump water heaters.
    – National Construction Code: A set of guidelines and regulations governing the design and construction of buildings in Australia.

    Suggested Related Links:
    Victoria Government – Housing
    Nationwide House Energy Rating Scheme (NatHERS)