Premier to shout the pizza!
Beggars, as most first home buyers consider themselves, can not be choosers. So the September 1st cut in their stamp duty thresholds are definitely welcome. In the Sunshine State there’s now zero duty on a first home of $500,000 or less, up from the previous cut-off of $350k. Despite the recent interest rates cuts it’s still tough to get into the market so governments need to act. All other owner-occupiers got a small reduction too with the 1% flat rate extending to $350k, up from $320k. These are all great news for home buyers in Bundaberg and Cooktown. But in downtown Brisvegas they’re the proverbial drop in the bucket. We don’t have too many $400,000 homes! The first home buyer concessions stop at $550k, so for example buying a $750k home to occupy will come with a stamps bill of $19,600, down just $150 since the changes.
Now we don’t want to be seen to be ungrateful… but is $150 really going to help inner-Brisbane home buyers? Pizza and beer on move-in night maybe, while the government coffers swell with another twenty grand.
Hidden in the government’s detail is the increase on duty for investment purchases. That same $750,000 property bought as a rental now has a tax grab of $26,775, up $500 since Captain Bligh’s changes! This will flow on to tenants in higher rents of course, possibly reducing their savings and guaranteeing they never take advantage of those lower duties on their own purchase!
Meantime this week’s new ABS construction stats show loans for new houses have dropped to their lowest level since 2002. We’re not building enough and ANZ Bank’s senior economist says the growing housing shortage is setting the scene for “the mother of all housing booms”. They say pent-up housing demand is heading for record levels.
Serious initiatives have to be looked at for improving the supply of new housing, including long overdue reductions in taxes on new land releases. For inner city suburbs what about Morris Iemma’s idea (remember, used to be the NSW Premier!) for home owners to build and rent a “Fonzie Flat” in the backyard. Fonzie starred in TV’s “Happy Days” and his was over the garage. Morris suggested owners could earn rent from the flats but still retain the Capital Gains Tax exemption for their otherwise owner-occupied homes.
In the meantime maybe that $150 stamps reduction could be changed to a free letterbox for every new home built?!