Where to from here?
We welcome the Commonwealth government's Productivity Commission inquiry into First Home Ownership. We will be making it clear in our submission that we view inequitable taxation by state governments on residential property, land supply problems and inefficient planning and approval processes as major hurdles for first home buyers.
Real Estate Institute of Australia research showed that in the June quarter 2003, stamp duty contributed a high of 4.79 per cent to the median house price in Melbourne, with duty of $17,200 payable on the median house price of $359,000. Similarly in Sydney, homebuyers were paying $16,415 stamp duty on the median house price of $465,000, or 3.53 per cent of the median house price.
It is the view of the REIA that affordability of housing, particularly for first home buyers, could be increased through the following initiatives:
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- State governments reduce stamp duty on residential property
- State governments adjust stamp duty scales for residential property
- Commonwealth government index link the First Home Owners Grant Scheme to either the Australian median house price or each separate state median house price
- State governments abolish the practice of tax on tax, such as stamp duty on GST-inclusive house prices
- Commonwealth and state governments seriously examine the cost and benefits of increasing public housing through private/public funding arrangements, such as the model proposed by the Australian Housing National Research Consortium
- Commonwealth and state governments fulfil their commitment to review the Inter-Government agreement of July 1999 to abolish some state taxes and identify other inefficient taxes for abolition or reduction.
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