Date: 1 October 2011 Property developers welcomed the NSW coalition government's 2011-12 budget measure, which will see stamp-duty exemptions restricted to newly built and "off the plan" homes, in an effort to stimulate building activity. From January 1, 2012, first-timers in the property market will no longer be able to avoid having to pay transfer title charges on existing homes under $600,000.The revised First Home Plus and First Home Plus One schemes will provide full transfer duty exemptions for newly built home costing up to $500,000, and partial duty exemptions for homes worth between $500,000 and $600,000.The $7000 first-home-buyer grant will continue to be available to all eligible first-timers. The Home Builders' Bonus for over-55s who buy a newly built home costing up to $600,000 has also been extended so they are exempt from paying stamp duty until July 1, 2012. Stamp duty is the single greatest hurdle to affordability, and this latest moves supports research which identifies that such taxes are highly inefficient. Some observers such as the Housing Industry Association refer to this as the “unfair tax” and one that is preventing the residential market and the economy as a whole from benefiting from a range of positive impacts and its abolition cannot come soon enough. Affordability is also influenced by the supply of new housing stock and hence developers occupy a vital position in the market but the sentiment at present is that there is little to be gained by proceeding with new projects. Excessive red tape and associated costs of development is not reflected in the margins achievable and so we are left at a standstill. Initiatives such as the First Home Plus scheme of stamp-duty exemptions (in NSW) are a boost to sales of new homes and developments. And with new housing at historically weak levels, and a weak fiscal position, it is clear that new home buyers are left out of the market when faced with high upfront costs. Governments as well as developers struggle with attempts to make buying a new home relatively more attractive than buying an existing dwelling for first-home buyers. Here, the Real Estate Institute of NSW said the tightening of stamp-duty exemptions would end the great Australian dream for many in the state. To some, the dream of home ownership will now become simply unachievable, although the Property Council of Australia said the axing of stamp-duty concessions for existing homes would be unlikely to have a long-lasting effect on housing prices.
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