In South Australia, we have had combined grants of up to $23,500 for first home buyers purchasing a new property. I don't believe handouts such as this are sustainable, and someone has to pay via tax, including low-income earners who may never be able to purchase a home.
This country needs to unshackle its handout mentality that the government (taxpayer) is expected to provide assistance for almost everything. Reduce government charges such as stamp duty and have a mature discussion on GST, which appears to be impossible with the mentality of those occupying Canberra at our expense.
A modest property of $350,000 incurs government fees of $16,505 in South Australia, excluding conveyancing, rate adjustments and moving expenses. The bottom line is a first home buyer needs to save 10 per cent – not five per cent – to purchase a property as well as pay rent. This is typical of the government – giving with one hand and taking with the other.
GST allows the individual to decide how much tax they pay based on the value of purchase. Increasing the level of GST, reducing taxes and the crippling government charges – especially state-related – would have a dramatic and immediate impact on affordability. The counter argument will be that property prices would also increase. Even if property prices increased by 10 per cent, this would mean a first home buyer would have to save an additional $1,750 to raise the five per cent – a far cry from $16,500. Even a 20 per cent increase would mean $3,500.
The most negative issue regarding government property charges is that they have to be paid in addition to the purchase price, instead of repaid over a period of up to 30 years, as is the case with the purchase price or valuation of a property.