As each level of Government around the country looks for ways to help the economy get back up to speed as we recover from the impact of Covid-19, one of the topics that has been popping up in the media recently is the possibility of stamp duty reform?
Stamp duty has long been a cause of angst for many home buyers in Victoria. For example, if you are purchasing your principal place of residence for, say $1 million, and it is not your first home, you are likely to pay just over $49,000 in stamp duty. If you are an overseas buyer, that figure will be higher still.
The alternative that has been on the agenda for several state governments is an annual land tax, rather than a stamp duty charge that is only applied when you purchase a property. For most buyers, the stamp duty charge is a factor than impacts on their total borrowings, meaning that not only do they have to pay this expensive tax every time they move, they also pay interest on it as well.
It is important to remember that whilst the Federal Government has asked all the states and territories for their tax reform proposals in order to assist in the economic recovery, it will take quite some time for any changes to become a reality. We also need to remember that whilst the concept of an annual land tax will appeal to some, those people who have recently paid stamp duty will not be impressed with the idea of adding an additional annual charge to their budget.
Of course, if you are looking for different ways to reduce your home ownership costs, one of the most overlooked ways of achieving this goal is to ask a Mortgage Broker to look at your refinancing options, particularly in a market where fierce competition between lenders has reduced home loan rates even further in recent weeks. With loans available in the early 2 per cent range, and with cashbacks of up to $2,000 being offered by lenders to help you refinance, a home loan health check is a very smart move right now.
So, if you need any advice or assistance in making the current market conditions, whether you want to buy, sell or both, be sure to give Ian Reid Buyer and Vendor Advocates a call on 03 9430 0000. You’ll also find lots of helpful tips on the property market in our free booklet, “Fatal Real Estate Traps Exposed”.