We’ve lived in our house for 55 years. Most home owners will live in their “forever homes” for that sort of time.
For a first home buyer where the land is worth $1.5m the current NSW stamp duty is around $67,500 paid over a 30 year mortgage @ $2,250 year.
The rate could easily be halved to make it $34,000 .
Under the government proposal, annual Tax on Housing for a first home buyer of a property with $1.5m of land would be: $400 plus .3% of $1.5m ie $4,500 = $4900 a year. Over 55 years they would pay about $270,000, or 4 times as much as they do now.
What a clever political strategy, painted as lowering the cost of housing by increasing it.
For richer people buying a home with a land content of $3m, stamp duty would still only be $150,000, paid over their mortgage term. $120,000 less!
The Housing Tax is heavily biased against younger, poorer people in favour of richer older people.
Good for government, bad for voters. A real win for property developers as the initial home cost plus tax is lower and those buyers will probably not think of the nearly $5,000 a year in tax they will be paying for life on top of their mortgage.
I urge young and poorer people wanting to buy their first home to join Voters Network for lower, not higher home cost. There are many ways to cut home costs. Voters Network can help buyers understand them.
Greg Bloomfield, retired FCA, CPA