Stamp Duty On Agenda
Calls for the abolition of stamp duty are once again on the agenda with the Real Estate Institute of Australia calling for it to be at least removed from older Australians who want to downsize.
REIA president Leanne Pilkington says it adds substantially to the cost of transacting and is stopping some people from moving and freeing up larger homes for families. She says the transition from stamp duty to land tax could be one of the most significant reforms in real estate policy, but she admits it is not on the radar of many State Governments.
“While the economic benefits are clear, most state governments remain hesitant to implement such a major change,” she says. Pilkington says it is a real financial hindrance to buying and selling.
“Effectively, you’re looking at tens of thousands of dollars just in tax every time you move,” she says.
“The impact is that people stay put in homes that don’t suit them anymore. Older people stick around in large homes while young families squeeze into tiny apartments because the cost of moving is just too high.”
This week Queensland axed stamp duty for all first-home buyers purchasing new builds.
Home Building Up
New home building is set to pick up this year, as investors turn to new house and land packages.
Oxford Economics Australia research predicts total dwelling commencements will increase by 4.5% in FY2025. It also tips another 4.3% increase the following year.
Oxford Economics Australia, head of property and building forecasting Timothy Hibbert says a lot of the demand for new houses is coming from property investors who are buying a larger share of the house and land packages than in the past. He says that is because there are fewer off-the-plan apartment developments underway, so investors are shifting their focus from units to houses.
“We used to see first home buyers make up a much bigger share, but their numbers have fallen back quite significantly when it comes to house and land purchases,” he says.
Hibbert says in Victoria, 76% and NSW, 71%, more investors took out loans for the construction of dwellings in December2024 compared to five years earlier. The trend he says is also emerging in the other states.
Call To Prioritise Buyers
The majority of Australians want the government to focus spending on affordable home options rather than tax breaks such as negative gearing for investors according to a new survey.
A survey, commissioned by Everybody’s Home, of 2500 voters found almost half wanted the Government to focus on funding affordable homes, while only 17.5% thought tax concessions for investors should be a priority.
More than a third of respondents say housing is their biggest cost of living pressure, followed by groceries (26%), energy bills (16%) and insurance (9%). Maiy Azize from Everybody’s Home says this could make housing more affordable.
But an analysis by the Property Investment Professionals of Australia (PIPA) says changes to tax incentives are already forcing investors to leave the market and that is not good news for renters.
It says when investors leave the market it reduces the rental pool, making it even harder for renters to find a home and putting upward pressure on rents.
