Stamp duty should be cut further as a means of stimulating first home buyer demand, the head of the Real Estate Institute of Victoria (REIV) has said.
In a statement released ahead of Tuesday’s state budget, REIV CEO Enzo Raimondo said that the First Home Owners Bonus had done its job and it was time to shift attention to assisting all first home buyers.
“Over the past two years the overall number of first home buyers in Victoria has dropped by a third,” Mr Raimondo said. “The data from the Australian Bureau of Statistics (ABS) indicates that Bonus does not appear to be helping more first home buyers take the first step into home ownership.”
Victoria’s First Home Owners Bonus sees purchasers of new homes receive $13,000, with another $6,500 available for those who buy new homes in regional areas.
“The Bonus for new homes was always intended as a temporary stimulus measure and since it was significantly increased in 2009 the number of dwelling commencements has increased by 37 per cent from 10,361 houses per quarter to 14,180,” Mr Raimondo continued.
“Whilst there is sufficient demand for this level of increased construction there should be no need for further stimulus.”
“The state government has already implemented its commitment to streamline first home buyer assistance by cutting stamp duty, first by 20 per cent and then progressively to 50 per cent.
“Reducing stamp duty can provide a more efficient outcome for both the buyer and the state, as it reduces the number of transactions and red tape created through the application process.
“Stamp duty is a significant impost and barrier so cutting it is a more efficient and equitable method of helping first home buyers.
“As it stands the Bonus is only funded till 30 June. If the state government had the money to spend the REIV would prefer to see it used to help all first home buyers by further cutting stamp duty.
“It is worth noting there is already preferential treatment for new home buyers in the tax system. First home buyers purchasing new homes can enjoy considerable concessions to stamp duty when buying off the plan and will also benefit from the broader 50 per cent cut to stamp duty.
“In the REIV view cuts to stamp duty help all first home buyers and should be the focus of the state’s assistance into the future,” Mr Raimondo concluded.