Government grants and concessions on stamp duty taxes are meant to support first home buyers to enter the property market, although one industry association says the support is “unimpressive”.
The Housing Industry Association (HIA) released the latest edition of its Stamp Duty Watch
report yesterday and the association’s senior economist, Shane Garrett, said most of the “support” offered to first home buyers doesn’t even go towards their home.
“For the purchase of a median-priced new home, FHBs in NSW, Victoria and WA will use up the whole grant and more on the stamp duty bill. In SA and the ACT, FHBs are left with only a few hundred dollars of their grant to actually put towards their new home after stamp duty has been handed over,” he said.
Garret added that the stamp duty tax also adds significantly to the cost of buying a home and should be a priority for both the state and federal governments to review.
“Dwelling price growth over the past year has pushed stamp duty bills even higher, with the Northern Territory, Victoria and NSW particularly badly affected. Stamp duty bands and rates do not respond to episodes of strong price growth,” he said.
“Stamp duty holds back new home building activity and has very detrimental effects on home affordability. The tax adds hugely to household indebtedness by forcing monthly mortgage repayments upwards. Reform aimed at reducing the burden of the tax must become a priority for both state and federal governments.”