Stamp duty cut for first homebuyers in Vic

 

Stamp dutyFirst homebuyers across Victoria will save thousands of dollars in stamp duty as the state government makes good on its promise to slash the tax in its first budget.

The government will proceed with its commitment to slash stamp duty by 20 per cent for first home buyers on properties valued less than $600,000 from July 1.

This equates to almost $5,800 in stamp duty savings on the median house price of $565,000.

Real Estate Institute of Victoria chief executive Enzo Raimondo hailed the move as the most significant attempt to help people buy their first home in 10 years.

“Over the last decade there has been a bit of tinkering by the previous government but not much relief,” he said.

“It’s a first genuine step to address the affordability issue for first homebuyers.”

Before the last election, the coalition promised to halve stamp duty for first homebuyers by 2014.

Mr Raimondo said the government should also overhaul the stamp duty rates.

“Stamp duty needs to be reviewed again and significant changes made because it is double what it was 10 years ago,” he said.

Cutting stamp duty will impact on a major source of revenue for the government, with Treasury predicting before the last election the government would collect $3.8 billion from the tax in 2011-12.

Treasurer Kim Wells delivers his first budget on Tuesday.

The Victorian Employers’ Chamber of Commerce and Industry (VECCI) is calling on the government to introduce performance pay incentives for teachers.

VECCI senior policy manager Andrew Rimington said with the flat-lining of Victorian students’ year nine national testing results, lifting the standard of teaching could help turn this trend around.

He said the business sector was concerned too many students were leaving school before finishing year 12.

Mr Rimington said poor numeracy and literacy was particularly an issue in areas of high social disadvantage.

“One of the things we can do is to reward teachers who are performing better and getting results with their students,” he told AAP.

“Performance pay is something that’s accepted in the corporate world and the public service and it is worth a try to see how that sort of approach could in fact see changed behaviour.”

He said a trial incentive pay program for teachers, along with 1000 retraining scholarships over four years for areas of teacher shortages like maths, would cost up to $16 million over four years.

Mr Rimington said bonuses could be paid to attract teachers to disadvantaged areas.

Low levels of literacy and numeracy among workers was slowing productivity, he said.

“We have got to put in a circuit breaker somewhere to start to address these crucial issues for the existing stock of students in schools now,” he said.

© 2011 AAP

Tags: government, news, property, real estate, stamp duty

 

 

Stamp duty adds to homebuyer pain

stamp dutyA report shows that stamp duty levels in Australia increased by 36 per cent in the last five years, adding extra financial stress on home buyers.

The second Residential Stamp Duty report from BankWest also reveals that Victoria has overtaken New South Wales as the state with the highest stamp duty costs in the country.

In the two years since the first report, median stamp duty bills have increased in all Australian capital cities except Perth, where bills have remained constant.

BankWest senior analyst Tim Crawford says bracket creep is mostly to blame for the increases in stamp duty costs.

House prices have continued to increase but most state and territory governments have not changed their stamp duty thresholds.

“We found there’s actually quite a lot of variation between states,” Mr Crawford said.

“The highest bills are actually in Victoria and in Melbourne and the lowest bills are in Queensland and in Brisbane.

“Melbourne bills are above $30,000 for the median house compared to Brisbane where they’re just over $7,000 for the median house.”

Mr Crawford says stamp duty bills in Melbourne are now the most expensive, taking over from Sydney.

“Across Victoria as a whole, we’ve seen a 38 per cent increase in the typical stamp duty bill over five years and that the typical bill in Victoria is pushing towards $20,000,” he said.

“And in Melbourne we’ve seen a 76 per cent increase in the median stamp duty bill over five years.”

That means for median priced houses, Melbourne home buyers are having to set aside four and a half months worth of their average household income to pay for the stamp duty on their houses.

The new Liberal Government in Victoria campaigned on stamp duty issues and is now preparing to cut stamp duty for first home buyers.

“We are trying to make it fairer than what it was before. On a medium price house in Melbourne of $565,000, the amount of stamp duty that was being paid on that house in Melbourne, for example, was more than $28,000,” Victorian Treasurer Kim Wells said.

“So by bringing in our package, there’ll be a 50 per cent reduction on that.”

The president of Real Estate Institute of Australia, David Airey, says cuts in stamp duty are commendable, but systematic reform is needed.

“In most capital cities, taking the median price as it is now, let’s call it $500,000, the median price in 2000 across Australia was around $220,000 and in 1990 it was around $100,000,” he said.

“Stamp duty in that time has gone from being a couple of thousand dollars to, in some cases on the median price, in some states, around $20,000.”

David Airey says that is due to the lack of any adjustment by the states to move the thresholds up in line with the median housing price.

He says state and territory governments are too dependent on income from stamp duty and property taxes and federal intervention is the only way the issue will be properly addressed.

“It’s interesting how pressure has been brought on the government to force the banking reform package because the perception was that the banks are making too much profit and they’re pushing up interest rates,” he said.

“Yet the state governments are probably the worst offenders with the stamp duty, land tax and regional taxes and all the things that they push in their own revenue raising sources and they’re ignored.”

The BankWest report says the total amount of stamp duty on property purchases, residential and commercial, paid over the last five years has risen more than 50 per cent, adding up to a total of $57 billion in state and territory revenue.

Story by Rachel Carbonell ABC News

Tags: money, news, property.real estate, research, stamp duty, tax

Stamp duty cuts to help First Home Buyers

REIV LogoThe REIV has welcomed the commitment by the new State Government to cut stamp duty for all eligible first home buyers by 50 per cent over the next four years. This policy will be implemented in stages, with a 20 per cent cut on 1 July 2011 and then 10 per cent each year thereafter until 2014.

We have also welcomed the commitment to maintain the existing current first home buyers grant and bonus for new homes.

These policies will assist in addressing affordability for first home buyers.

This means that as of 1 July 2011 the first home buyer of an established home with a value of under $600,000 will be entitled to a 20 per cent cut to stamp duty and the $7,000 First Home Buyer Grant.

On a home that cost the buyer $450,000, the current stamp duty payable is $18,970. On 1 July that will drop to $15,176. In addition, the first home buyer will be entitled to the $7,000 grant. On a home that cost the buyer $565,000 the current stamp duty payable is $28,970. On 1 July that will drop to $23,176. In addition, the first home buyer will be entitled to the $7,000 grant.

Buyers of a new home in metropolitan Melbourne will retain an entitlement to the bonus worth $13,000 and those buying a new home in regional Victoria will retain their entitlement to a total of $20,500.

A promised new policy will see farmers aged under 35 exempt from stamp duty on the first $300,000 worth of agricultural land purchased. Depending on the final details, this could save them up to $11,370.

First home buyers who are planning to buy a home from the middle of next year should take the time to study the detail, including eligibility requirements, when they are deciding what and where to buy.

Tags: first home buyers, news, property, real estate, stamp duty, victoria

Libs preferred on stamp duty policy

stamp dutyTHE real estate and building industries have thrown their weight behind the Coalition’s $750 million pledge to cut stamp duty in an election bidding war over the lucrative property tax.

The opposition plan would cut stamp duty for first home buyers in half over four years, while Labor’s $115.4 million plan would abolish the tax for first home buyers building homes in regional Victoria.

The Real Estate Institute of Victoria said that while both parties had recognised home buyers were paying too much stamp duty, the Coalition’s policy, which applies to homes costing up to $600,000, was more generous.

”Once fully implemented, the Coalition’s policy would ensure all Victorian first home buyers were not subject to the highest stamp duty rates in Australia,” said the institute’s chief executive, Enzo Raimondo.

”The government knows the majority of first home buyers buy established housing in the metropolitan area and so their policy should be applied more widely.”

State Treasury figures released in the second week of the election campaign show whoever wins government can expect more than $3.8 billion in stamp duty revenue this financial year. That figure will grow to more than $4 billion for 2013-14.

First home buyers in New South Wales, Queensland and Western Australia do not pay stamp duty.

The Master Builders Association said the Coalition’s stamp duty cuts represent tax relief as well as ”real tax reform” and would dramatically improve housing affordability.

Executive director Brian Welch said Labor’s cuts would help country Victorians and ease pressure on Melbourne growth by encouraging home buyers into the country.

Having previously announced $38 million stamp duty cuts for seniors and a reduction in payroll tax, Labor sold its stamp duty cuts as targeted and financially responsible.

It attacked the Opposition’s policy as ”lies” with ”unaffordable” cuts that would cost the state jobs and put the budget into deficit.

But Labor’s attack was undermined by Treasurer John Lenders, who was unable or unwilling to say how many Victorians would benefit from its policy when asked at a lengthy press conference.

Hours later, Premier John Brumby had no hesitation saying about 4000 people a year would be assisted by Labor’s stamp duty policy.

The Premier said Labor’s promise would help first home buyers and stimulate the building industry and employment in a time of increasing interest rates and continuing global economic insecurity.

”It’s about creating new jobs, it’s about pushing activity into newly constructed homes,” he said.

”It’s not the sort of Baillieu-land promise … where money grows on trees.”

Mr Baillieu said his cuts to stamp duty were achievable and affordable without cutting public sector jobs and services.

He said they would be funded from predicted budget surpluses and savings he would introduce if the Coalition won power.

”This is essential otherwise we are going to price young families out of the housing market,” he said.

Story by David Rood The Age Newspaper

Tags: finance, government, legislation, news, property, real estate, research

Vic coalition wins stamp duty bidding war

BrumbyThe vast majority of Victorian home buyers would be worse off under a re-elected Labor government.

Only about 16,000 first home buyers are expected to benefit from Labor’s surprise election week pledge to scrap stamp duty on newly built homes in regional Victoria.

While the policy is a potential windfall for a small handful of eligible home buyers, most would be stung more in stamp duty as the government continues to profit from rising property prices.

The cuts would cost government coffers $115 million over four years, against a forecast stamp duty take of more than $15 billion.

In contrast, the coalition’s 50 per cent stamp duty cut would apply to all first home purchases, up to $600,000, across the state.

The opposition estimates the $750 million plan would benefit about 160,000 first home buyers over four years.

As stamp duty was thrust into the spotlight less than a week before the election, the coalition appeared to have won the bidding war.

But Labor’s more generous proposal for a niche group of home buyers may prove popular among young voters in key regional seats.

In an almost 30-minute press conference, Treasurer John Lenders refused to say exactly how many home buyers would directly benefit from Labor’s stamp duty promise.

It was left to Premier John Brumby a short time later to admit that it would be just 4000 a year out of about 67,000 owner-occupier purchases.

Mr Brumby said the policy was not just about helping first home buyers but also about stimulating the construction industry and creating jobs.

“We’ve got housing shortages, and the way you lift the level of housing supply is by providing more benefits for newly constructed homes,” he said.

Opposition Leader Ted Baillieu said his stamp duty cuts would be phased in over four years to prevent an interim freeze in the first home buyers market.

Stamp duty would be cut by 20 per cent from July 1 next year and a further 10 per cent in January 2013, January 2014 and September 2014.

“We believe this is a really essential step to ease the burden for families and make housing more affordable for first home buyers,” Mr Baillieu said.

Victoria has the highest rate of stamp duty in the country.

First home buyers in NSW, Queensland and WA pay no duty.

Both major parties have promised to retain the state first home bonus, worth between $7000 and $26,500.

Labor has also pledged to lift the stamp duty concession threshold for seniors, which will benefit about 9000 home buyers over four years, while the coalition has promised stamp duty exemptions for young farmers.

Real Estate Institute of Victoria chief executive Enzo Raimondo said Labor’s plan would do little to ease housing affordability, with 70 per cent of first home buyers buying established houses in metropolitan areas.

“On balance, if you compare the two policies, the Liberal Party is the most generous for first home buyers in Victoria,” he said.

Master Builders Association executive director Brian Welch welcomed both policies, but said the first home bonus should be scrapped in favour of permanent stamp duty relief.

Story by Catherine Best, Greg Roberts and Greg Rule www.ninemsn.com.au

Tags: marketing, news, property, real estate, research, tax

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