First-time home buyers welcome new property tax

Aspiring homeowners Avneet Kumar, 38, and Namrata Nath Kumar, 35, who have been saving for five years, also welcomed the property tax option.

Midwest tenants expect to be pre-approved to buy a home worth $850,000 in the coming days and are hoping to buy a townhouse or duplex like Marsden Park or Quakers Hill. At that price, they would face a stamp duty bill exceeding $33,000.

First-time home buyers Avneet Kumar and Namrata Nath Kumar welcomed the news, but were unlikely to delay their buying plans.

“There are definitely some questions we have, but overall [a property tax] sounds better. If something… is out of reach for our pre-approval now, we may have a larger deposit [if we don’t have to pay stamp duty upfront]“said Mr. Kumar.

But with their lease due to expire in the coming months, the couple can still move forward with their plans rather than wait for property tax to be introduced. They were also wary of how the tax might increase over time as land values ​​increase, and would need to do some math to see what the tax might be for the homes they were considering.

Recent first-time home buyer Bjorn Shearer, 26, thought it was a fantastic idea and only wished it was in place when he bought a two-bedroom flat two weeks ago .

“I think we should have moved to property tax policy much sooner,” Shearer said. “Stamp duty creates one more hurdle for people to get out of the rental market, not having that lump sum payment will be a good thing, if we were looking again now it would be a huge weight on our shoulders.”

The North Beaches pharmacist and his partner have been saving for more than three years and have used the federal government’s First Home Super Saver program. Assessed out of their region, they looked to Newcastle, where they wanted to buy under $650,000 to qualify for stamp duty exemption.

“I think if we hadn’t already purchased…we probably would have waited until [the property tax] comes into force, because it could have influenced our decision in terms of the maximum price if we did not have to pay stamp duty,” Shearer said.

Domain modeling shows that a buyer of an $800,000 home may have to pay property tax for 15 years to reach the cost of stamp duty.

Buyers agent Rich Harvey, managing director of propertybuyer.com.au, said stamp duty was a significant tax for first-time home buyers and noted that it had become increasingly difficult to benefit from an exemption for a family home in Sydney, with homes in the city. west and southwest direction north of $800,000.

“A much lower property tax is a much nicer way to enter the market and can drive demand down,” he said.

Mortgage Choice broker Rob Lees said the program would primarily appeal to those looking to spend more than the $800,000 threshold for a stamp duty concession.

“It’s definitely going to help people who want to spend more money, because those first-time home buyers wouldn’t normally have any benefit,” he said.[That $1.5 million threshold]this is the average house price for city dwellers, so it’s good to include those people as well. »

Penny D. Jackson