The Cost of Building a New Home in Melbourne
Thursday, 10 January 2019 12:00 AM
Time to Read: 2 minutes, 20 seconds
So you want to build a home in Melbourne, but you’re not sure how much it will cost? We’ve got you covered. Here, we outline the cost of building a new home in Melbourne – with a few must-know tips to get your budget sorted.
Location, location, location
First off, you’ll need to buy a patch of soil. But be prepared: land in Melbourne is the second most expensive in Australia. The good news? A median-priced lot in Melbourne costs over $100,000 less than Sydney – or $359,000 compared to $467,500.
As well as budgeting for land and construction costs, you’ll need to factor in stamp duty.
Land transfer duty
Land transfer duty, also known as stamp duty, is a tax you pay when you buy property in Australia:
It’s based on the price you paid for the property or its market value, whichever is greater.
The more expensive your house is, the more tax you’ll pay. If you’re buying a property in Melbourne worth $600,000, you’ll need to pay almost $25,000. If your home is worth $800,000, you’ll be up for just over $43,000. An online calculator will help with the sums.
Buying your first home?
If you’re a first home buyer, you can access exemptions or concessions on this land tax:
If your property is worth $600,000 or less, you might be eligible for a first home buyer duty exemption. In other words, you won’t have to pay land transfer duty at all.
If your property is valued between $600,001 and $750,000, you might be able to access a concession. The cheaper the property, the bigger the reduction.
Buying off the plan?
If you’re buying off the plan, you might only need to pay tax on the land itself, not the building. This can equate to big savings in your pocket, but your eligibility depends on how much your home is worth. If it’s not your first home, your property – minus construction costs – must be $550,000 or less. If it is your first home, you get a little more leeway.
First Home Owner Grant
Separate from the concessions outlined above, you could be eligible for $10,000 back in your pocket via the First Home Owner Grant – but only if you’re buying your first home worth $750,000 or less.
Of course, to access these concessions and grants, you’ll need to meet certain criteria. Generally, your home needs to be your main residence and you’ll need to live there continuously for at least 12 months.
A Final Word
Navigating the ins and outs of building a home can be complicated. As Australia’s most trusted builder, G.J. Gardner Homes has local knowledge and expertise. If you’d like to leave all the details to us so you can focus on the fun job of choosing your home design, get in touch with your local office today.