The Victorian 2020-2021 Budget has delivered for the building industry after the effects of the coronavirus pandemic this year. The Big Housing Build Initiative and a 50% slash in stamp duty have experts making optimistic predictions about the construction of 15,800 new homes and returns to the pre-COVID market by 2022-2023.
What is the Big Housing Build Initiative?
The Victorian government’s Big Housing Build Initiative is both Victoria and Australia’s largest-ever investment in public and community housing. The initiative demonstrates an awareness that the effects of various lockdowns in Victoria this year will have disproportionately affected low-income earners.
The investment is totaled at $5.3 billion. It will see 12,000 homes constructed throughout metropolitan and regional Victoria (or 15,800 when combined with existing investments). The construction of these homes will support an estimated 10,000 jobs a year over the next 4 years, helping to speed up the state’s economic recovery.
The Big Housing Build aims to increase Victoria’s social housing supply by 10% in 4 years, building 9,300 new social housing homes and replacing 1,100 old public housing units. A further 2,900 low-cost homes will be constructed for private rental and low-moderate income earners.
The initiative will expand rental options, help low-moderate income earners live closer to work and increase the availability of social housing. All of this will provide a stable foundation for many vulnerable Victorians to build their lives.
Stamp Duty
One of the greatest budget announcements for prospective buyers was that the cost of stamp duty has been slashed by 50%. This incentivising discount applies only to newly built homes with a value up to $1 million. The discount will be available until the end of June 2021.
For those buying existing homes, stamp duty will be reduced by 25% on homes of the same value.
A 50% land tax discount has also been introduced in the budget for build-to-rent (BTR) developments. From 1 January 2022 until 2040, an exemption from the Absentee Owner Surcharge will also apply. The exemption aims to incentivise the construction of another 5000 homes for renters.
Energy Affordability and Efficiency
The budget is full of good news for renters, who are an influential group to support in the goal of supercharging our economic recovery.
A $797 million investment in improving the energy efficiency of existing and future homes has been announced. The key deliverables include:
- An expansion to the Solar Homes program that means solar photovoltaics (PV) rebates will total 65,000 this year and 140,000 over the next two years
- Increased eligibility for the Solar Homes battery rebates, expanding the rebates to 17,500 households over the next 3 years
- 15,000 solar PV rebates for small Victorian businesses made available over the next 3 years
- An investment of $335.5 million over 4 years to improve the efficiency and cost of heating and cooling for 250,000 low-income households
Victorian premier Daniel Andrews explained the energy affordability and efficiency investment by saying, “Too many rentals are like ovens in summer and fridges in winter. And too many tenants are shelling out a fortune on bills because their heater is older than they are. That’s why we’re bringing in minimum standards for insulation, draught sealing, and hot water systems.”
If the budget announcements have prompted you to consider contributing to the push for greater construction, we have an extensive directory of builders and house plans designed to suit a variety of budgets and requirements.
Enquire for free with us today to see how we can get the ball rolling on your new build. Or for the latest plans and prices, download our Ultimate Build Guide for Melbourne.