Stamp duty concessions could be on the cards

In an address to brokers at an event hosted by short-term property lender Semper Capital, research analyst at CoreLogic, James Shang, said that policymakers may consider providing prospective home buyers, particularly first home buyers (FHBs), with further stimulus to support their entry into the property market.

According to research from Adelaide Bank and the Real Estate Institute of Australia (REIA), demand from FHBs has declined despite the continued fall in residential dwelling values.  

Adelaide Bank and REIA’s study found that in the three months ending 31 March 2019, FHB activity dropped by 19.7 per cent over the quarter and 11.6 per cent year-on-year.

Mr Shang has said that while cuts to the official cash rate and proposals to ease mortgage serviceability assessment guidelines would help improve housing affordability, policymakers may also consider introducing additional stamp duty concessions.

“Lenders are asking for a 20 per cent deposit plus stamp duty, and if you think about it, for a first home owner, a 20 per cent deposit plus stamp duty is a pretty chunky number to come up with to get into your own home,” he said.

“I think we’ll probably see a push towards stamp duty concessions.”

The analyst said that governments would “compensate” for revenue losses by introducing new land taxes.

The latest data from the Australian Bureau of Statistics (ABS) revealed that state and local governments collected $30.3 billion in property taxes over the 2017-18 financial year, up 6 per cent from $28.6 billion in the previous financial year and increase of $9 billion over the past five years.

The ABS reported that property taxation made up 14 per cent of state government revenue over the 2017-18 financial year and was the sole source of revenue for local governments.  

[Related: Prime Minister notes ‘economic challenges’]