Stamp duty ‘lay-by’ scheme could help first-time buyers get into the market
The Real Estate Institute of NSW has proposed several options to the state government in order to encourage first-home buyers into the market. One such scheme would allow first time buyers to pay off their stamp duty over a three-year period, making it less costly for them at the time of purchase, if adopted.
Since the laps of the stamp-duty waver for first-home buyers at the end of last year, many would-be first timers have been stalled in order to save up to meet their stamp duty obligation, resulting in a drop in first home buyer activity since.
Marketing consultant Michael Willcocks, 28, who missed out on the stamp duty relief late last year could envision getting into a property much sooner, should a stamp-duty ‘lay-by’ scheme be put in place.
“It would cut out several months of saving up the stamp duty and get me into a property sooner,” he says.
With housing affordability a pressing issue for first-time buyers, such a scheme would reduce the initial cost of getting into a property by spreading this out over 36 months. The adoption of a stamp-duty ‘lay-by’ scheme would surely encourage more first-time buyers to get into the market.
Currently, there is only the original $7,000 federally-supplied first-home owners’ grant on offer, which applies only to pre-existing properties and therefore does not push for the construction of new dwellings.
We already have a housing shortage in Australia, which is expected to fall short by over 150,000 dwellings by the year 2020, going by figures released by the Housing Industry Association last year.
Setting out schemes that drive construction of new homes and encourages new buyers into the market would benefit both the construction and real estate industry.
Other schemes presented to the state government by the REINSW look at concessions for buyers over 65 in an aim to make it easier for them to down-size their homes.
Introducing new legislation that works toward the reduction of our housing shortage, increases affordability and hence home ownership, combined with further interest rate cuts would create an up-swing that would strengthen the property market and our economy.
Robert Projeski is a leading property finance expert and the founder and managing director of Australian Mortgage Options. He has appeared on radio and TV and written extensively on property and finance matters.
