20 Jun NSW budget fails home buyers: REINSW
The NSW Government has failed to address stamp duty rates in yesterday’s budget, which haven’t been updated in 32 years.
Despite the housing affordability crisis being labeled as “the biggest issue” for people in NSW less than two years ago, there was little announced to address the issue at the state budget on Tuesday.
Soaring house prices in recent years saw a $4.3 billion housing affordability package put front and centre in last year’s budget.
This included measures to help out first-home buyers, such as abolishing stamp duty on properties under $650,000, and a number of other measures making it harder for investors and foreign buyers to purchase property.
Sydney house prices took their biggest hit since 2015 this year, with a 2.6 per cent drop over the last quarter.
And now that the housing market is cooling off, the NSW government appears to have halted new measures to improve housing affordability altogether.
“Over the past 12 months housing cooled more quickly than previously forecast,” Treasurer Dominic Perrottet said in his budget speech yesterday.
What the 2018 NSW budget means for property at a glance:
- The First Home Owner Grant will more than double to $15,000 for first-time buyers of new property. From 2024, the grant will drop to $10,000.
- The $7000 First Home Owner Grant will be abolished for existing properties.
- First home buyers will continue to be exempt from stamp duty if buying new property. The threshold lifts from $600,000 to $650,000.
- Non-first home buyers will be eligible for a $5000 grant if buying new property.
- $481 million allocated to a Housing Acceleration Fund to build infrastructure in areas of housing growth in an effort to assist the supply of new housing.
- Ten projects costing $181 million have already been identified in eight areas of housing growth, which will together support 76,000 new homes. These areas are: Camden/Liverpool, Blacktown, The Hills, Hornsby/Parramatta, City of Sydney, Wollongong, Wyong, Port Macquarie-Hastings.
REINSW CEO Tim McKibbin said the government collected $8.673 billion in stamp duty, $1billion less than 2016-17.
“The number of transactions has fallen and will continue to fall because people aren’t buying and selling real estate,” Mr. McKibbin said.
“The Budget forecasts $6 billion less than previously budgeted in stamp duty over the next four years but an increase by $407.6 million in land tax from stronger forecasts for land values,” Mr McKibbin said.
“Taxation is driving the market into the ground. It is fiscally naive, irresponsible and unconscionable not to reduce the stamp duty rates.
“There is empirical evidence that shows reducing taxation will increase the number of transactions and therefore it is a win – win. Government will get additional revenue and the consumer will get a more affordable product.
“The government can save a lot of time and money consulting the community on how to solve housing affordability – the answer to affordability is increasing supply and reducing property taxes,” he said.
He told WILLIAMS MEDIA the NSW government needs to begin taking action instead of making empty promises. He suggests that a full review of property taxes is needed in order for there to be any change – the current outdated stamp duty rates are doing nothing to help affordability, he says.
“The NSW government continues to over tax the property market and then says they will look at affordability – and then they can’t understand why things aren’t improving,” he said.
“It’s time to conduct a full review of property taxes, in particular stamp duty brackets, and make a real change. There has been more said than done and we need action – not words,” he said.
“Albert Einstein said ‘insanity is doing the same thing over and over again and expecting different results’. Persisting with outdated stamp duty rates and impediments to supply will not improve affordability,” he said.
Read more about the NSW 2018-19 Budget and how it will impact you on the NSW government website.