Research completed just before New South Wales proposed removing the current stamp duty system in place has made clear abolishing the tax would be effective in significantly reducing the time it takes for first home buyers (FHB) to get on the property ladder.
According to the Gateway Bank survey, 63% of FHBs are confident doing away with stamp duty would reduce the time it will take them to save for a house by an average of 20 months; just under 25% said it would reduce their homeownership timeframe by three whole years.
The bank’s research, based on a survey of 700 Australians who plan to purchase their first property in the next four years, revealed that a third (32%) of FHBs feel the current stamp duty and other fees are prohibitively high.
Gateway Bank CEO Lexi Airey acknowledged that the NSW government is not suggesting they simply eradicate the duty, but instead replace it with a different kind of recurring tax; however, she highlighted the crucial difference of a smaller, annual payment as compared to a lump sum.
“While the NSW Government is proposing to replace stamp duty with a property tax, many first home buyers would be encouraged by any measure providing full or part relief from this upfront, one-off, cost,” she said.
“The proposed move to a new system stands to significantly fast-track the time to homeownership for first home buyers, and when combined with current government schemes, provides a range of support measures for those looking to get their foot on the property ladder.
“This will be particularly welcome news for many Australians who have had utilise their deposit savings during the COVID-19 pandemic.”
Airey also spoke to the broker opportunity she sees in the swelling conversation around stamp duty.
“Given the NSW Government’s proposal for stamp duty changes is yet to be finalised, and the landscape is changing quite quickly, there is a real opportunity for brokers to support FHBs,” she said.
“While there are a number of support options available, buying any property can be daunting, particularly your first home. That’s where brokers continue to play such an important role in supporting FHBs to navigate the market.”