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Budget Threat for First Home Buyers

04 April 2014
The Real Estate Institute of Western Australia has warned the State Treasurer against scrapping the stamp duty exemption for first home buyers in the May budget.
REIWA President David Airey, said pressure on the government to cut costs and raise revenue must be exercised with great care.
“We are gravely concerned that the government might be tempted to increase stamp duty for all buyers and scrap the stamp duty exemption for first home buyers,” Mr Airey said.
“The property market in WA is only just stabilizing after several volatile years, while current REIWA data indicates a market downturn for the second half of this year.
“It’s critical that current policy settings remain in place and property taxes are not increased, distorting a fragile market,” Mr Airey said.
Mr Airey said the stamp duty exemption for first home buyers was introduced by the Carpenter Labor Government in 2007 and had been ‘extraordinary successful’ at nurturing the market.
“Cost of living and housing affordability is much tougher in WA than it is in other states, but removing the stamp duty impost from first home buyers saves most of them around $14,000 and helps them get into a home of their own.
“In combination with low interest rates, first home buyers have flourished in WA but the signs are that this is now trending downwards and it would be devastating if they soon get hit with stamp duty.”
“Getting rid of first home buyer relief or increasing stamp duty across the board would also hit the housing construction sector through the increased cost of land.
“The clear evidence from NSW, which recently scrapped its tax concessions for first home buyers, is that first home buyer activity collapsed and hasn’t recovered.   
“It has been a similar experience in Victoria where other concessions for first home buyers were removed or diminished,” Mr Airey said.
Mr Airey said that first home buyers were critical to the overall health of the property market because they helped nurture construction and facilitated the trade-up market
“Our evidence-based budget submission to the government outlines core reasons for not increasing property taxes and for maintaining the stamp duty exemption for first home buyers,” Mr Airey said.
Data from the Office of State Revenue show activity by first home buyers has been falling for several months, slipping from 1,974 applications in July last year to 1,540 in March. 
 

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