A leading Canberra real estate principal says first home buyers will have a better shot at home ownership in the new financial year.
McIntyre Property founder Col McIntyre says the new rate of concession on stamp duty that comes into effect on July 1 will be welcomed. Stamp duty is a transactional tax which adds to the cost of buying a house, apartment or land.
Under the latest Home Buyer Concession Scheme, from July 1, no duty will be payable on the purchase of a home, provided the total gross income of the purchaser (including their partner) for the financial year before the transaction date is below $160,000, and they fit other criteria which is yet to be determined in the upcoming ACT budget.
The concession scheme applies to the purchase of a new home or a block of vacant residential land, and at different levels, depending on the transaction date.
Mr McIntyre says for eligible buyers this will provide about $16,979.20 of conveyance duty concession for a property worth $607,000.
He recalls when the first home buyers’ concession was implemented in July 2000, the number of people applying for home loans and purchases of new properties increased significantly.
Mr McIntyre says in Canberra an individual’s average income is about $85,000, so the latest stamp duty concession should benefit a significant portion of the working population.
“We have found that buyers that are eligible to benefit from the concessions are aware of the scheme,” Mr McIntyre says. “Some sellers of eligible properties are also delaying putting their home on the market as they think there will be more buyers once the additional concessions of the scheme kick in on July 1.”
Master Builders ACT chief executive Michael Hopkins says the stamp duty concession is not before time. “According to Australian Bureau of Statistics figures, loans to first home buyers in February accounted for 18.7 per cent of owner occupier loans, the lowest result in the country,” Mr Hopkins says.
The MBA is hopeful that the home buyer concession will boost first home buyer purchases, especially for new homes and units.
Mr Hopkins says some buyers are waiting until July 1 to take full advantage of the stamp duty concessions, in turn, this is causing a short-term impact on the market. The ACT Government could stimulate more first home buyer activity if the starting date for the reforms was brought forward.
Mr Hopkins says the biggest obstacle for first home buyers in the ACT is the cost of our land, which has risen sharply in recent years.
Clarity Financial Group Managing Director Mark Edlund says his firm ensures clients raising home finance are aware of all government policies, and their eligibility is factored into any lending strategy Clarity recommends.
“For any buyer of property, whether they are first home buyers, upgraders or downsizers, the impost of stamp duty is a major impact on their decision when they buy and how much they spend,” he said.
“Any additional reduction to this tax, which is what it is, will positively affect the decisions buyers make and improve the flexibility of where people reside and their ability to relocate to accommodation befitting their lifestyle,” Mr Edlund said.
For more information please visit the home buyer concession scheme.
Original Article published by John Thistleton on The RiotACT.