Tasmania drops stamp duty concession for first-home buyers

Tasmanian Premier and Treasurer Lara Giddings has culled a long-running stamp duty concession for first-home buyers, just as housing in the state is becoming more affordable and buying conditions are improving.

From June 17 2011, first-home buyers will no longer be eligible for stamp duty concessions of up to $4,000, announced in the Tasmanian budget on June 16.

The concessions had been in place since May 20, 2004.

Under the First Home Owners Duty Concession for Vacant and Established Dwelling, concessions of up to $4,000 were available for purchase of established dwellings up to a value of $350,000.

The maximum concession available in relation to the purchase of vacant land was $2,400, provided the land did not exceed $175,000.

The removal of the concession comes at a time when Tasmanian houses are becoming more affordable and buying conditions improve, but also as first-home buyers desert the market.

The proportion of income required to meet home loan repayments in Tasmania decreased 1% to 28.2% in the March quarter according to the latest REIA/Deposit Power Housing Affordability report.

At the same time, the number of new loans to first-home buyers decreased 8.3% in the March 2011 quarter to 343 loans. The number of loans to first-home buyers decreased 23.1% over the past year, according to the same report.

The CBA Home Buyers Index rates Hobart as a buyer’s market, as it has “some of the best buying conditions in recent times” with median house prices decreasing 5.6% over the March quarter to $361,250.

The removal of the concession will save the state $9 million and is part of a drive to compensate for $1.5 billion that is has been wiped from expected revenues.

The first-home owners grant scheme remains in place.

Other housing incentives to suffer under cost-saving measures include:

• limiting land tax concessions for pensioners to principle places of residence and primary production land, which will save the Government $1.6 million; and
• removing the land tax exemption on holiday home land, which will save Tasmania $3.2 million.