Victoria housing market changes 2024: Eight key things set to hit the state this year

Victorian property experts have warned homeowners and buyers that they are set for one of the most complex years in the state’s housing market’s history, as major government-mandated changes hit home.

Here are eight market changes that have come in or are set to commence:

Land Tax – January 1, 2024

Impacting investment, commercial and holiday home properties, from 2024 it will be applied to land valued above $50,000, instead of the $300,000 minimum in 2023.

This will cost owners $500 if their land value is $50,000-$100,000 and $975 from $100,000-$300,000. Land worth more than $300,000 will pay $975 plus 0.1 per cent of the land value above $300,000.

Estimated impact: 860,000 owners (380,000 for the first time)

Cost increase on $500,000 land value: $1175.

Absentee Owner Surcharge – January 1, 2024

An existing surcharge will rise from a 2 per cent of a property’s dutiable land value to 4 per cent. It only impacts offshore owners who do not reside in Australia.

Estimated impact: 3916 transactions in 2022-2023 financial year

Cost impact on $500,000 land value: $11,175 (including land tax increase)

Gas Substitution – January 1, 2024

Gas connections will be phased out for new home approvals, unless they are part of an estate that already has a planning approval, from January 1. Gas bottle connections are still allowed. Electric appliances, typically induction cooktops and heat pump water heaters, are currently more expensive than their gas counterparts.

Estimated impact: 40,000 homes

Cost impact: $2250-$5300 (depending on quality)

National Construction Code — May 1, 2024

Homes approved for construction after May 1 will be required to be built to a seven-star energy efficiency standard under the Nationwide House Energy Rating Scheme (NatHERS). Homes will also be required to meet new liveability standards, including for accessibility to differently-abled Victorians.

Estimated impact: 50,000 homes a year

Cost impact: $30,000-$40,000 for a standard new home

Help to Buy – 2024

Co-buying scheme to support Australians who do not own a home and earn $90,000 or less as an individual ($120,000 or less for households). Approved buyers with a 2 per cent deposit co-buy with the federal government paying for up to 30 per cent of the home’s cost (40 per cent for new builds) for an equivalent stake in the home, capped at $850,000 in Victoria’s metropolitan areas and $550,000 for the rest of the state.

Estimated impact: 40,000 homebuyers (national)

Cost impact: up to $340,000 off home purchase price

Rental Bidding Ban Extension – Expected in 2024

A ban on soliciting rental bids, where tenants offer more than the advertised price, will be extended to fine agents and landlords who accept unsolicited rental bids.

Estimated impact: 624,000+ private rentals across Victoria (Census, 2021)

Fines: $11,000 (individual); $55,000 (body corporate) under current solicitation legislation.

Short-stay accommodation levy – January 1, 2025

A 7.5 per cent levy on income from homes listed for rent on short-stay accommodation rentals. More detail will be clarified as the levy approaches its January 1, 2025, launch date.

Estimated impact: 36,000 properties

Cost impact: $750 for every $10,000 rent

Vacant Residential Land Tax – January 1, 2025

A 1 per cent land tax addition on the capital improved value of a home deemed vacant applicable in inner and middle-ring Melbourne suburbs. In 2025 it will expand to all homes around Victoria, unless the owner lived there at least four weeks of the year — or rented it out for at least six months.

Estimated impact: 700 homes

Cost increase on $500,000 capital improved value: $5000

Source: realestate.com.au