50% Stamp Duty Cuts

50% Stamp Duty Cuts

Victoria Opposition Leader Ted Baillieu

Coalition To Slash Stamp Duty For First Home Buyers By 50%

Victor P Taffa

A Victorian Liberal Nationals Coalition Government will slash stamp duty for eligible first home buyers by 50 % on Principal Place of residence homes, Coalition Leader Ted Baillieu said today.

The Coalition’s 50 % Stamp Duty Cut for eligible first home buyers will be phased in over the first term of a Baillieu Coalition Government, starting with a 20 % Cut from 1 July next year.

Mr. Baillieu said first home buyers will be eligible for the 50 % Stamp Duty Cut for new and established principal place of residence homes valued at up to $600,000.

“This will mean that a first home buyer purchasing a $600,000 property will save $15,535 on stamp duty.” Mr. Baillieu said.

First Home Buyer Stamp Duty Cuts
Property Cost*

Present Stamp Duty

20% Cut

50% Cut

20% Cut

50% Cut

Principal Place of Residence

Pay

Pay

Saving

Saving

$100,000

$2,150

$1,720

$1,075

$430

$1,075

$150,000

$3,870

$3,096

$1,935

$774

$1,935

$200,000

$6,370

$5,096

$3,185

$1,274

$3,185

$250,000

$8,870

$7,096

$4,435

$1,774

$4,435

$300,000

$11,370

$9,096

$5,685

$2,274

$5,685

$350,000

$13,870

$11,096

$6,935

$2,774

$6,935

$400,000

$16,370

$13,096

$8,185

$3,274

$8,185

$450,000

$18,970

$15,176

$9,485

$3,794

$9,485

$500,000

$21,970

$17,576

$10,985

$4,394

$10,985

$550,000

$24,970

$19,976

$12,485

$4,994

$12,485

$600,000

$31,070

$24,856

$15,535

$6,214

$15,535

* REIV puts the Median Price for a House in Melbourne at $565,000 in the September Quarter 2010
.

“Housing affordability been has seriously eroded after 11 years of Labor.” Mr. Baillieu said.

“Victorian housing is now amongst the most unaffordable in the nation and thousands of Victorians can no longer afford to even contemplate buying their first home.”

“Stamp duty represents a huge burden for first home buyers.” Mr. Baillieu said.

“For many it is the difference between being able to make that successful bid they can afford or being locked out of the property market indefinitely.” Mr. Baillieu said.

The Coalition’s first home buyer stamp duty package represents $750 Million worth of Tax Cuts for Victorian families over the first term of a Baillieu Government.

Implementation timetable

The Coalition will implement a 20 % cut to the current level of stamp duty in its first year of office. The cuts will increase progressively to 30 % at the beginning of 2013 and 50 % by September 2014.

First Home Buyer Stamp Duty Reduction Schedule

Cut

-20%

-10% (30%)

-10% (40%)

-10% (50%)

Timing

1 July 2011

1 January 2013

1 January 2014

1 September 2014

 

First Home Buyers Grant and Bonus Retained

The existing current first home buyers grant and bonuses for new homes will be maintained.

Currently, eligible first home buyers are entitled to a $7,000 grant on an existing home while eligible first home buyers of a new home up to a value of $600,000 are entitled to a bonus of $13,000 in Metropolitan Melbourne, with an additional regional new home bonus of $6,500 available.

Stamp Duty in Victoria

Victorians pay the highest levels of stamp duty in Australia on family homes. The purchaser of a Melbourne Median-priced home of $565,000 (Source: REIV – September Quarter 2010) is slugged $29,000 by Premier John Brumby in Stamp Duty.

Since 1998-99, under Labor, revenue from Stamp Duty on land transfers will have increased by 280 %, from $1 Billion to a forecast $3.8 Billion in 2010-11 (Pre-Election Budget Update), and by a further 10.5 % to $4.2 Billion by 2013-14.

On a $565,000 Melbourne Median priced family home, Victorian non-first home buyers pay $28,970 in Stamp Duty compared to $20,915 (27.8 % lower) in NSW and $11,275 (61 % Lower) in Queensland.

The consequences for Victorians burdened by Australia’s most uncompetitive Stamp Duty regime are significant.

The High Stamp Duty Tax Regime makes Metropolitan, Regional and Rural Housing more unaffordable. This deters Victorians from buying a home closer to their place of work, and purchasing a home to suit their lifestyle and changing circumstances.

Labor’s inefficient stamp duty regime does nothing but drag down Victoria’s economic potential. Victorian home buyers, particularly those wanting to enter the housing market for the very first time, deserve a better deal.

The median cost of a house in Melbourne now is more than eight times the average annual pre-tax wage, which is making it extremely difficult for first home buyers in particular to enter the market.

According to an international housing affordability survey by Demographia, released in January this year, average Melbourne household would need to spend more than 50 % of its annual income to pay for a mortgage on a median-priced house.

The survey found Melbourne housing was ‘severely unaffordable’  and of the 272 cities surveyed, Melbourne was the third most unaffordable.

Responsibility for Election Comment

Under the provisions of the relevant Electoral Act responsibility for all election comment is assumed by Editor Victor P Taffa. The Registered office of The Southern Thunderer is at 4/69a Darvall Road, West Ryde NSW 2114.