Win – Win Option For Stamp Duty Relief
October 15th, 2011 by Geoff Baldwin
To expect the state governments to abolish or even significantly reduce the stamp duty impost on homebuyers is unrealistic in the short term however an amortization scheme would be a win-win for all parties according to RE/MAX WA Regional Owner, Geoff Baldwin.
“Although I totally relate to the constant calls for our state governments to ease the stamp duty burden to assist and encourage home purchase it is doubtful the reliance on this significant revenue source will be relinquished easily”, Mr Baldwin said.
“State governments have been relying on the millions of dollars generated by stamp duty for many decades and the reality is that this income has become critical to the economic welfare of each state.
“On the other hand Stamp Duty remains as the most significant financial barrier to home purchase and with the market struggling to gain traction now is a good time to look for a palatable solution for all parties.
“In addition to deposits, loan establishment costs, settlement costs and agent’s costs for those selling to repurchase, stamp duty is often the major deal breaker and is seen by the majority of buyers as a painful extra burden.
“The simple solution is to allow homebuyers to spread the payment of stamp duty over 10 years and in so doing maintain the income for the states while significantly softening this extra barrier to home purchase or repurchase.
“If a home owner were to sell before the stamp duty is repaid the outstanding balance would simply be due and payable at sale or settlement of the property.
“Naturally, to assist in financing this measure an interest component may need to be levied however there should also be an incentive in place for people to pay their stamp duty up front if they choose that option.
“To assist in the successful and financially viable introduction of this new system it would probably have to happen over several years with a reducing lump sum to be paid upon purchase and the rest over time.
“State governments have an obligation to ensure the ongoing viability of all industries and any measures taken to assist home purchase would provide a much needed boost to the established and new home sectors which are both massive employers”, Mr Baldwin said.