Victoria Housing Market Changes 2024: Eight Key Things Set to Impact the State

The Victorian property landscape is bracing for a seismic shift in 2024 as a slew of government-mandated changes ripple through the housing market. From alterations in taxation policies to energy efficiency standards, homeowners and buyers are set to navigate one of the most intricate years in the state’s housing history. Here are eight crucial market changes that have already taken effect or are on the horizon:

1. Land Tax Reform (January 1, 2024): In a significant adjustment, land tax thresholds have been revised downward. Previously applicable to properties valued above $300,000, the tax will now impact land valued above $50,000. This change is poised to affect approximately 860,000 property owners, with varying cost increases depending on the land value.
2. Absentee Owner Surcharge (January 1, 2024): For offshore owners not residing in Australia, the absentee owner surcharge has doubled from 2% to 4% of a property’s dutiable land value. This surcharge hike, coupled with the revised land tax, could significantly impact overseas property investors, with estimated costs skyrocketing.
3. Gas Substitution (January 1, 2024): As part of a broader environmental initiative, gas connections for new home approvals will be phased out, unless part of pre-approved estates. While electric alternatives offer sustainability benefits, they come at a higher upfront cost, affecting approximately 40,000 homes.
4. National Construction Code Update (May 1, 2024): Post-May 1, homes approved for construction must adhere to a seven-star energy efficiency standard under NatHERS. Additionally, new liveability standards, including accessibility provisions, will be mandatory. These upgrades, while promoting sustainability and inclusivity, may inflate construction costs.
5. Help to Buy Scheme (2024): Targeting first-time buyers earning $90,000 or less individually ($120,000 or less for households), this co-buying scheme aims to ease entry into the housing market. With the government pitching in up to 30% (40% for new builds) of the home’s cost, the scheme is set to benefit around 40,000 homebuyers nationally.
6. Rental Bidding Ban Extension (Expected in 2024): An extension of the ban on rental bidding aims to curb unfair practices. Agents and landlords who accept unsolicited rental bids will face fines, offering relief to tenants in a competitive rental market.
7. Short-Stay Accommodation Levy (January 1, 2025): Starting in 2025, a 7.5% levy on income from short-stay accommodations will be imposed. With approximately 36,000 properties impacted, this levy seeks to regulate the booming short-term rental market.
8. Vacant Residential Land Tax (January 1, 2025): Targeting vacant properties, a 1% land tax addition on the capital improved value will be imposed. Unless occupied for a minimum period or rented out, homes will incur this tax, affecting around 700 properties.

In conclusion, Victoria’s housing market is undergoing a significant transformation in 2024 and beyond. While these changes aim to address various concerns such as affordability, sustainability, and fairness, they also present challenges for homeowners, investors, and renters alike. Navigating this evolving landscape will require a thorough understanding of the new regulations and their implications.