The current government schemes in place to provide stamp duty relief for FHBs are “poorly designed” and “not suited to current market conditions”, according to the Property Council of Australia.
Property Council executive director Jane Fitzgerald has said that while it is a good sign that government is considering assisting first home buyers, it is important to “look at the whole equation” for sustainable solutions.
Doing so involves looking at both stamp duty cuts as well as boosting housing supply, according to Ms Fitzgerald.
“If we provide assistance on the supply side, we must also look at demand side solutions, otherwise we will just add additional pressure to an already heated market,” she said.
Ms Fitzgerald pointed out that over the past five years, revenue for property-based stamp duty in NSW in particular has doubled from around $4 billion to over $8 billion.
“And this is occurring as house prices in this state have sky rocketed putting additional cost of living pressure on families and young people across the state — stamp duty reform is well overdue,” she pointed out.
“The current government schemes in place that are supposed to provide stamp duty relief for people trying to get a foot into the property market are poorly designed and not suited to current market conditions,” she added.
“First home buyers can get an exemption from stamp duty – but only on properties valued up to $650,000 – all but useless when the median price for a home in Sydney is $1 million.”
The NSW government could do two things tomorrow to remedy the situation, Ms Fitzgerald says.
Firstly, they could revise the threshold for stamp duty concessions that are currently available to first home buyers.
Secondly, Ms Fitzgerald said that the “archaic” stamp duty tax brackets should be brought up to date.
“On the current scale, more than 50 per cent of properties in Sydney are being slogged with the highest rate of stamp duty,” she emphasised.
“Stamp duty reform should be a 2017 priority for the NSW government and we must look at solutions that help first home buyers, but also boost housing supply,” she concluded.