First home buyers will save thousands of dollars this year as the state government moves to cut stamp duty, extend the first home bonus, and provide more concessions for low-income earners.
But Victoria is still the second most expensive state in which to own a home, and industry experts warn it will not be enough to stop thousands of people being priced out of the market as the population continues to soar.
Premier Ted Baillieu’s first budget is expected to contain $754 million to deliver on his election promise to halve stamp duty for first home buyers over the next four years, with the first 20 per cent reduction taking effect on July 1.
This will mean that anyone buying property worth $565,000 – the median house price – will get a saving of $5794 on a stamp duty bill that would otherwise be $28,970. By the time stamp duty is halved in 2014, this saving will be valued at around $14,485.
Victorians buying a $300,000 first home will get stamp duty cuts worth $2274, with the savings rising to $5685 in 2014. And for metropolitan homes worth $600,000, buyers could save more than $19,000 when the $13,000 first home buyer’s bonus is also taken into account on top of stamp duty reductions.
The changes will be a centrepiece of Treasurer Kim Wells’ budget speech on Tuesday, with about 157,000 households expected to benefit over the next four years. But industry experts warn that without more affordable housing, many people will still miss out on owning a home.
Real Estate Institute of Victoria figures show 1676 loans were issued to first home buyers in January this year – the lowest level in seven years. Spokesman Robert Larocca said government assistance had failed to keep up with rising property costs and stamp duty taxes, therefore schemes such as the home buyers bonus were now worth about half of their value, in real terms, than they were 10 years ago.
”First home buyers are deserving of assistance, and this will help bring some of them back into the market, but we need a multiple approach to deal with housing affordability,” Mr Larocca said.
The budget is also expected to contain:
??????????????????????? An increase in the stamp duty concession threshold for low-income pensioners to cover properties up to $750,000.
??????????????????????? The continuation of the first home buyers’ grant and bonus for the next four years, which provides a $7000 grant on an established home, a $13,000 bonus for a new home in metropolitan Melbourne, and $19,650 for those buying in regional Victoria.
Tackling housing affordability was a central plank of Mr Baillieu’s pitch to voters ahead of last year’s election. But it is likely to prove challenging, given more home buyers are being pushed out of the market than ever before, including at new estates on the city’s urban fringes, where homes are meant to be reasonably priced.
Opposition treasury spokesman Tim Holding said Labor expected the government’s first budget to deliver ”on every promise they made”, including stamp duty cuts.