REIQ slams Queensland's withdrawal of stamp duty discounts for non-first home buyers

The Real Estate Institute of Queensland has slammed a decision by the Queensland Government to remove stamp duty concessions for non-first home buyers.

From August 1, 2011 non-first home buyers will no longer receive stamp duty deductions when buying a new or established home as their principal place of residence, state treasurer Andrew Fraser announced in the June 14 state budget.

Home duty concession rates came into force on July 1, 2008, providing relief on a sliding scale.

Non-first home buyers purchasing properties costing between $350,001 and $540,000 are currently entitled to a concession of $3,500 plus $3.50 for every $100 or part of $100 over $350,000.

The removal of the concession means from August 1 non-first home buyers will have to pay an extra $8,000 on a median-priced house in Brisbane – currently $430,000 according to RP Data figures.

The extra costs are likely to hurt the wallets of majority of home buyers – last year about 60% of all dwellings financed in Queensland in April were to non-first home buyers.

First-home buyer stamp duty concessions will remain for homes up to $500,000.

REIQ chairwoman Pamela Bennett says the removal of the concession for non-first home buyers will “wreak havoc on the Queensland property market”.

“The market is already the lowest it has been in many years, and this announcement will just make it worse,” she says.

“The Government is obviously trying to fill the financial void that has been left by the weak property market and the subsequent lower stamp duty receipts, given the marked reduction in property sales over the past 18 months.”

According to Bennett, a better way to stimulate the economy would have been to “provide financial incentives for all buyers of all types of properties, which in turn would have increased activity and therefore helped the Government’s bottom line”.

Removal of the concession is expected to save the Government an extra $161 million in the coming financial year and $247 million the following year.

Other housing measures announced in the budget include $10,000 building boost grant, which will be available for all people building or buying a new-build home or unit priced up to $600,000 between August 1, 2011 and January 31, 2012.

The REIQ says the grant’s value will be greatly diminished by the increased rates of stamp duty, and it is also unlikely to assist more first home buyers into the market.

“There has been a huge reduction in first-home buyer activity over the past year, and this grant is unlikely to change that state of affairs to any significant degree,” Bennett says.

The grant means first-timers will be able to access $17,000 as well as stamp duty concessions when purchasing a new-build home or unit.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Comments

Be the first one to comment on this article
What would you like to say about this project?