As part of its bid for government in March, on property purchases of up to $800,000 and to offer a reduced rate for homes up to $1 million. This promise can be weighed against the,which Labor has vowed to axe if elected. Labor’s proposal has been costed at $6.6 million less than the government’s $728.6 million four-year plan.
Any reforms that ease pressure on first home buyers are welcome and likely to influence younger voters in the March state election.
While Labor’s promise to abolish stamp duty for some may be simpler to understand than the government system,many will question whether it goes far enough to address the state’s massive housing affordability problem. The $800,000 threshold is $200,000 lower than the average Sydney house price.,“If you’re purchasing your first home,for a median priced property in Marsden Park,[Sutherland,Camden,Oran Park],you get no benefit” under Labor’s policy.
Labor says independent modelling by the parliamentary budget office shows that within the first three years of its proposed changes,27,700 first home buyers across NSW would have paid no stamp duty. A further 18,800 people would have paid a discounted rate. It claims that 95 per cent of all first home buyers in NSW will pay no tax or a reduced rate under its model. First home buyers in regional NSW,where the median property price is $691,509 according to property data firm CoreLogic,would be among those to benefit.
Premier Dominic Perrottet’s new scheme,announced in November,allows for properties under $1.5 million. They would pay an annual levy of $400 plus a 0.3 per cent tax on the value of their land. Treasury officials estimate that about 6500 first homebuyers will opt in to a broad land tax each year.
Analysis from financial comparison website Canstar suggests a first home buyer who opts to pay an annual land tax on an $800,000 property.
While the tax reform promises from both major parties sound generous,theHerald believes they do not go far enough in addressing the state’s housing affordability crisis. Rather than tinkering about the edges,voters will want more comprehensive policies that also address the needs for more social housing and affordable rents for those who are completely shut out of the housing rental market.
Domain chief of research and economicsa national rental crisis is set to worsen this year as international students and migrant workers return to Australia. Not only will more housing be needed for large numbers of new arrivals,pressure will also build on the limited stock of social and more affordable housing for the state’s most vulnerable people.
Cost of living pressures in the face of rising interest rates are another looming concern for those who can afford to buy a home. Reserve Bank figures show that housing debt now represents.
The federal government has recognised the need for more big-picture thinking by encouraging institutional investors and superannuation funds to look at buying into the affordable housing market. It has struck a national agreement with states and territories to free up land and build a million homes in five years with the backing of the $3.3 trillion superannuation sector.
As the Grattan Institute’s economic policy adviser Brendan Coates says,neither the government,nor Labor policies would have a meaningful impact on housing affordability or homeownership. He says,“these are very modest policies” that are first home buyers grants by another name. The main beneficiaries are likely to be vendors.
Likewise,it is difficult to see how Labor’s latest announcement to merge three existing government agencies into a single body to manage the delivery of social housing will do much more than reduce red tape.
TheHerald supports the abolition of stamp duty and the growing momentum behind property taxation reform to deliver lasting social and economic benefits to the people of NSW. Criticisms of this outdated levy,introduced in 1865,have been made for decades,with studies highlighting the wasteful and inequitable effects of stamp duty on property transactions. As with most policies,the final test will be in the attention to detail and effective implementation. But more work is needed to tackle our mammoth housing affordability problem.
As the March election gets closer,voters would be wise to put both parties’ policies for first home buyers under the microscope and lobby hard for meaningful change. Politicians are never as attentive as in the period immediately before the electorate decides whether they should keep their jobs or not. Voters will seek more substance behind what may otherwise sound like hollow claims.
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