The Victorian government has missed out on about $1m in stamp duty after a $150m end of financial year farm sale frenzy.
Seven agricultural land owners on Melbourne’s urban fringe fast-tracked deals in the final two days of June as developers warned they wouldn’t be able to make previously-mooted deals stack up after stamp duty costs rose on July 1.
Property purchases above $2m now incur a 6.5 per cent stamp duty rate for every dollar spent above $2m. The figure was previously 5.5 per cent.
While the cheapest deal, worth $5m, would have handed the government an extra $30,000 if concluded two days later, a $60m mega sale to the city’s west would have added a hefty $580,000 in tax.
Core Projects’ Kane Malcomson helped broker the deals for farms ranging from 3-26ha and said the deals had already been underway when tweaks to stamp duty and land tax, as well as a new windfall gains tax, were announced ahead of the state budget in May.
“The developers said they would stand by offers they had on the table, but were saying they would need to review their modelling if the deal couldn’t be done by June 30,” Mr Malcomson said.
“There was certainly motivation from both sides to get deals done.”
None of the deals would have been affected by the new windfall gains tax, and in all but one instance the farmers have indicated they will purchase a new plot further from the city and continue farming.
Property Council of Australia Victorian executive director Danni Hunter said the increased stamp duty and a separate increase to land tax costs for properties above $1.8m would soon punters more too.
“This will no doubt have the impact of making housing and land prices more expensive for the end consumer,” Ms Hunter said.
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