Progress is gathering speed at Monument with construction now started on Stage 5. Stages 1&2 will be delivered in Q1 while stages 3, 4 &7 are expected in the back half of Q2 with more stages to follow.
There hasn’t been a better time to buy a house in Melbourne for two decades according to the Housing Industry Association (HIA).
Topics: Resi Ventures
Resi Venture’s Monument and Accolade estates will be a key part of the fastest growing metropolitan region in Melbourne over the next 17 years according to Victoria in Future 2019 (VIF2019).
The proposed changes to Stamp Duty charges on LDAs and JVs threatens a key plank of the delivery of land in Melbourne.
Tens of thousands of lots have been delivered under the LDA model by some of Victoria’s biggest developers such as Lend Lease, Dennis Family and Stockland and many thousands more lots depend on the structure to continue to provide supply.
For example, Stockland is developing 25,000 lots at Cloverton in Mickleham under an LDA and Caroline Springs was one of the most successful of the LDA developments.
If the LDA model is forced to pay Stamp Duty of 5.5% upfront then it will remove a key financial advantage to the delivery model and threaten the supply of land in Growth Areas. This will ultimately result in a future rise in land prices as demand exceeds supply.
The LDA model is useful for developers as it delays the Stamp Duty payments, not avoids them, until the land is productive and delivering lots to the market after the core infrastructure and pre-development costs have been paid.
This leads to more affordable estates due to a regular, long term supply of land which is what the Government requires to house the 100,000 + people that migrate to Victoria every year.
The Stamp Duty tax grab will also have a profound effect on small and medium sized developers too.
Resi Ventures is currently delivering thousands of lots under its unique LDA model and plans to deliver thousands more in the next decade but this is threatened by this new tax grab.
Currently Resi Ventures buys land under the LDA model on 3-4 year terms before Stamp Duty costs are incurred which is cashflow efficient.
We are not avoiding Stamp Duty just postponing the payment so we can deliver more affordable land.
Our legal advice says the tax changes will kill the market and could actually reduce revenue to Treasury by removing the LDA model from the market.
Topics: Land Development Agreements