Stamp Duty Relief Needed For a Housing Rebound
Stamp Duty relief has been revealed as the key factor to help the housing industry rebound from near historic lows in 2013, a national survey has found.
The survey by leading mortgage broker Loan Market which asked ‘what action can the government take to stimulate the housing market in 2013’ found an overwhelming majority of 55 percent of respondents citing stamp duty relief as the key to a strong 2013 for the housing industry.
Loan Market Corporate Spokesperson Paul Smith said the survey of the companies 450 Australian mortgage brokers showed, that while stamp duty charges differed from state-to-state, the tax was considerable obstacle for consumers looking to purchase an established home, especially for the time.
“Stamp Duty serves as an important source of revenue for state-based governments looking to create balanced budgets, but in many cases this tax can erode a significant chunk of a home buyer’s savings and sway their buying intentions.
“What Stamp Duty often does to consumers is reduce their deposit level so that they end up in Lenders Mortgage Insurance territory and have to pay an additional cost to establish the loan,” Mr Smith said.”
Mr Smith said that most lenders don’t charge LMI if you have a deposit of at least 20% of the property price however in many cases stamp duty charges were reducing deposit sizes so that the consumer must pay the insurance that protects the lender if the client defaults on their loan.
Mr Smith said that a range of Stamp Duty concessions are available for consumers who were purchasing their first home, building or significantly upgrading an existing dwelling.
“In every state First Home Buyers have some type of concession that helps them avoid this cost, however for those looking to purchase their second home or an investment property this is an unavoidable cost.
“With the RBA interest rate reductions in 2012 having a minimal impact on the housing industry it may be necessary for state-level governments to look at making further concessions to Stamp Duty charges so that housing sector can rebound,” Mr Smith said.
Mr Smith said that those looking to save extra money on stamp duty or receive a government grant should keep a close eye on the legislative talks of their respective sate governments.
“Changes to grants and concessions do not happen overnight so it’s best to be well researched on what policies are being discussed. If you act at the right time, you can save a significant amount of money that can allow you to pay you home off faster,” Mr Smith said.
Mr Smith said that a mortgage broker was well placed to offer the latest news on Stamp Duty and Home Owner Grants as well as find the right home loan for a borrowers personal circumstances.
What action can the government take to stimulate the housing market in 2013?
a) Create more stamp duty relief 55%
b) Lower property taxes 10%
c) Reintroduce or amend state level grants 32%
d) Release more land for home construction 3%