NSW Premier Dominic Perrottet’s Stamp Duty Reform
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NSW Premier Dominic Perrottet’s Stamp Duty Reform

As part of the NSW government’s budget, changes have been made to the tax.

By Kanebridge News
Tue, Jun 21, 2022 1:33pmGrey Clock 2 min

NSW first home buyers will be given the choice to pay stamp duty or an annual land tax under a major reform by the Perrottet government in a test to move away from transfer duties.

In Dominic Perrottet’s first budget as the NSW premier, he has proposed an overhaul of property and housing taxes.

Under the new $730 million property tax plan — that sits at the core of the NSW Budget — first home buyers will have the option of paying the upfront cost of stamp duty, or an annual property tax payment of $400 plus 0.3% of the land value of the property. It will be available on homes valued at less than $1.5 million.

Ahead of the budget, Mr Perrottet said the initiative is aimed at aiding first-home buyers get into the market.

“We want to lower the barriers to owning a home for first home buyers seeking a place of their own,” Mr Perrottet said. “In the past two decades, the share of first home buyers under 35 years of age has declined from 67 per cent to 61 per cent.”

The scheme put forward by the Liberal state government is the second of its kind in the country, with the ACT halfway through a 20-year transition away from stamp duty. There, once a buyer accepts the land tax option it is permanently removed from the stamp duty system.

The NSW model will differ from the ACT scheme in that homes can revert to stamp duty once they are sold to a new owner.

Legislation for the new plan will be introduced into parliament in the second half of the yar, with eligible first home buyers to apply to opt into the program from January 16 in 2023. Any home buyers who purchase in between the laws being passed and the program coming into effect will be able to have their stamp duty payments refunded.



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First time buyers determined to enter the Australian property market are taking creative approaches as interest rates steady

By Bronwyn Allen
Thu, Mar 28, 2024 2 min

Aspiring first home buyers are increasingly pooling their resources, adopting new strategies and making compromises to get themselves onto the property ladder, according to research from Westpac. About 56 percent of buyers surveyed are planning to buy their first property jointly with their partner compared to 40 percent three years ago. Three in four buyers say they are willing to compromise on location, up nine percent from three years ago, and 47 percent are willing to pay lenders mortgage insurance to buy their first home sooner.

Additionally, one in two first home hopefuls are considering ‘rentvesting’, whereby they purchase an investment property first ahead of a home for themselves. In this scenario, buyers typically continue renting in expensive lifestyle locations where they want to live and buy an investment property in more affordable locations, often on the outskirts of major cities or in regional areas.

The 2024 Westpac Home Ownership Report, released this month, is based on a survey of 2,015 Australians conducted in January. The report revealed increasing intentions to buy among all types of buyers, with 44 percent intending to buy in the next five years, up from 35 percent in July 2023. This may reflect expectations that interest rates have peaked, with the Reserve Bank keeping rates on hold since December.

Among first home buyers specifically, there was a slight decline in purchasing intention over the next five years, with 86 percent delaying buying a home due to cost-of-living pressures. The survey also found that more people are planning to buy an investment property, which is reflected in recent finance data from the Australian Bureau of Statistics showing a 20 percent increase in the value of investor loans issued over the past year. Additionally, more people are planning to upsize their homes or renovate their existing homes.

Westpac managing director of mortgages Damien MacRae said first home buyers “are becoming more ruthless with their goals”. “They understand it’s a big task, but they are determined to break into the market and are willing to compromise to get there,” Mr MacRae said.

Buyers still prefer houses, but there has been a five percent decline in this preference since 2021 and a seven percent increase for apartments. Preference for a townhouse, or house and land packages, has increased markedly. “Buyers are casting their expectations wider, willing to compromise on location and are forgoing everyday luxuries like food delivery. They are also more inclined to relocate and move to apartment living.”

The latest Westpac-Melbourne Institute Consumer Sentiment Index released this week shows the ‘time to buy a dwelling’ index rose 4.9 percent to 77.8 out of 100 this month, which is a 15-month high, but still relatively weak overall. Buyer sentiment is notably stronger in Victoria at 84.3, with Westpac senior economist Matthew Hassan pointing to softening home values over the past four months.

In contrast, the NSW index is at 73.3 out of 100, likely reflecting affordability challenges in Australia’s most expensive market. “Nearly 70 percent of consumers expect housing prices to continue rising in the year ahead,” Mr Hassan added.

 

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