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One of Australia’s brokerage groups has called for amendments to stamp duty charges.
Loan Market‘s director Mark De Martino said stamp duty charges should be amended to give first home buyers the option of delaying the tax and paying it when they sell their property.
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Mr De Martino said that if first home buyers were allowed to pay off the tax with the equity in their home when they sold it, more buyers would be able to enter the property market and avoid costly charges such as lender's mortgage insurance.
“First home buyers in each state are nearly non-existent, despite the efforts of the [Reserve Bank in] lowering interest rates and increasing confidence in the property market. One of the biggest challenges this group faces are erosion of their hard-earned deposits by stamp duty taxes,” he said.
“Allowing a first time buyer to pay stamp duty upon the sale of the property would instantly improve the loan-to-value at the establishment of the loan and allow new homeowners to save a significant amount of money that normally would be lost to tax.”
Mr De Martino said that while stamp duty was an important state-based tax that helped governments raise money needed for infrastructure and essential services, the actual date it was collected should be amended to encourage activity in the housing sector.
“This system would allow a first home buyer to pay stamp duty with the equity in their home instead of having to either bundle the cost into their mortgage or use their hard-earned savings. Essentially, the government can help buyers save money and having to pay the banks more interest.”
