Stamp duty changes welcomed but more needed to help downsizers
Stamp duty exemptions for First Home Buyers in the New South Wales Budget will be welcomed in NSW where many wanting to get into the market have been priced out.
However, LJ Hooker believes there also needed to be a focus on offering exemptions to users at the opposite end of the property cycle – seniors – to make in-demand homes available.
The NSW Government’s decision to scrap stamp duties for properties priced under $650,000 will save first time buyers almost $25,000 – a great first step toward furniture and property renovations or redecorations.
Additionally, there will be stamp duty discounts for first home buyers on properties priced up to $800,000.
LJ Hooker Head of Research Mathew Tiller believed the Budget measure would inspire more first time purchasers into the market.
“There has been a noticeable drop off in the number of first time buyers in the NSW marketplace over the last three to five years as they’ve struggled to pull together the necessary deposit and the general competition in the market,’’ said Mr Tiller.
“The Government has acknowledged the challenges faced by this typically younger buyer demographic and that stamp duty is one of the leading obstacles to home ownership.”
While the exemptions for First Home Buyers were welcomed, Mr Tiller said there was a need to offer stamp duty relief to older citizens, as well.
The Federal Government’s recent downsizing incentive - which allows eligible seniors to quarantine up to $300,000 from the sale of their property for superannuation, and even double that if a couple – represented one piece of the housing affordability puzzle.
A joint survey of 800 people aged over 55 by LJ Hooker and seniors’ property portal Downsizing.com.au found that:
- 70% of respondents are looking to downsize from the existing family home, either now or in the future;
- 89% of respondents had spare bedrooms in their family homes, which would be more likely to be occupied if the property was sold. Indeed, 64% had two or more spare bedrooms and 23% said they had three or more spare bedrooms;
- 25% of respondents however said the cost of moving – including stamp duty on their next purchase – made selling impractical.
“It’s clear that for any housing affordability measures to work, there needs to be an understanding of how different demographics are impacted,” said Mr Tiller.
“Even though seniors are already in the market, they still have concerns about selling, and stamp duty is one of the major obstacles. The Federal Government has made concessions for seniors, and if the NSW Government also appealed to this buyer group, many more family homes would be freed up for the marketplace, aiding affordability.”
Download our white paper that goes through the survey results click here.