Thousands of home buyers seeking to purchase one of the 3,020 homes up for auction between now and when the polls close on 27 November will face high stamp duty rates due to bracket creep.
REIV CEO Enzo Raimondo said that at the last election four years ago, a discount for the principal place of residence was introduced; however, it cuts out at $550,000 and has not been adjusted even though property prices have increased significantly.
"Four years ago the median house price was around $400,000, so it made sense to cap the discount; however, the median house price is now $565,000. This significantly reduces the benefit of a policy designed to help average home buyers.
"The failure to increase the discount for a principal place of residence means that someone buying a home worth just over $550,000 is paying an extra $3000 in tax for no sensible reason.
"For example, stamp duty on a home sold for $550,000 today is $24,970, yet if you pay one extra dollar — $550,001 — the stamp duty jumps to $28,070. Why?
"The current stamp duty rates are unfair and need to be reduced.
"The commitment on Thursday to cut stamp duty rates for pensioners shows that with the right policies, the state government can improve housing affordability and that reform is possible.
"John Brumby cut stamp duty four years ago and, given the tax on an average home has increased by 25 per cent in four years, there is no reason why can't do it again and equally no reason why Ted Baillieu can't match him," Mr Raimondo concluded.
Article Courtesy of REIV
