Stamp duty budget cuts will have domino effect
April 2nd, 2014 by Geoff Baldwin
Rumoured cuts or abolishment of the current stamp duty dispensations for first home buyers would have dire effects across the entire market and create a government instigated downturn at the worst possible time, according to RE/MAX WA Managing Director, Geoff Baldwin.
“The negative affect the ceasing of stamp duty relief for first home buyers would be extremely damaging however, when this segment of the market stagnates it ripples up through all price ranges and the effect would be crippling”, he said.
“If you take a line through NSW and Victoria where subsidies have been abolished, first home buyer activity has dropped to 8% and 12% respectively, compared to the current 22% in Western Australia (RP Data).
“Historically, in a healthy market, first home buyers account for around 25 to 30% of all buyers.
“The established home market has already taken a massive hit through the government’s recent actions in changing the First Home Owner Grant whereby those building new homes receive $7,000 and people buying established only $3,000.
“To abolish first home owner stamp duty concessions would be extremely short sighted as it will a negative impact the whole market and hence the Industry, just at a time where we are again experiencing some prosperity in the property sector”, Mr Baldwin said.