Qld abolishes Stamp Duty for FH Buyers

[GIDDO]

No stamp duty for FHBs, and I heard also cheaper duty for other OOs.

Any of you SS festors got an opinion:

How does this compare with other eastern states ?

Does it help affordability?

I would think that a saving of say $8000 on a house would make a difference; especially when it would mean that a deposit required would be smaller by $8000, wouldn't it???

 

[yo yo ma]

http://www.news.com.au/couriermail/story/0,23739,23802855-5005260,00.html

It is not stamp duty on the property but mortgage duty on the loan. The savings will be a lot less than $8k and depend on the value of the property (see examples below). It is actually being reduced this year and removed from July 1, 2009.

http://www.mrmortgage.com.au/mortgage-stamp-duty.htm

Queensland's Deputy Premier and Treasurer Anna Bligh will dangle a "housing affordability" carrot in her second Budget by announcing the State Government will abolish mortgage duty.
It will be a two-step process: 50 per cent coming off from January 1 2008 and the remaining 50 per cent by January 1, 2009.

Mortgage stamp duty is a State Government tax charged on property mortgages. The move will cost the Government about $435 million a year.

First-home buyers are already exempt from mortgage duty on mortgages up to $250,000, and are taxed at a lower rate on larger amounts.

But for second and subsequent home buyers and investors, there will be extra money in the pocket from next year.

On the average Queensland mortgage of $320,000, the initial saving will be $500, which will double to $1000 in 2009 when the duty is abolished.

On a $500,000 mortgage the initial saving will be $860, then $1720. For investors it's even better, with $1000 off next year, then $2000.

 

[yo yo ma]

Also interesting from the CM article that land tax payable is being reduced

Land tax will also be reduced with the amount payable at the $600,000 threshold reduced from $1200 to $500, benefitting about 15,000 taxpayers.

 

[yo yo ma]

It is not stamp duty on the property but mortgage duty on the loan. The savings will be a lot less than $8k and depend on the value of the property (see examples below). It is actually being reduced this year and removed from July 1, 2009.

The Courier Mail article contained incorrect information and this is wrong. For a rundown on the correct information see the Queensland Government Budget website

http://www.budget.qld.gov.au/at-a-glance/2008-09/queensland-state-budget-at-a-glance-2008-09.pdf

 

[WinstonWolfe]

Doesn't surprise me about the Courier Mail. I stopped reading it last year after one too many LCD dumbed down sensationalist wrong slants...deleted from bookmarks and all.

Same for ABC online news- the leftist bias skewed things beyond the ridiculous.


Interesting budget. It is only 7 years after the property and mining boom began that Labor have decided to cut back tax. Take a look at the compound rate of growth of tax revenue via mining royalties and increased stamp duty.

Interestingly, the Fed is screwing Qld again this year in GST handouts.

 

[FHB]

I did a bit of research on this, being a FHB in negotiations on a property I was wondering if I should hold off for this change to take effect. The reduction in stamp duty and mortgage duty is virtually nothing, unless you are buying a particularly priced property.

Mortgage duty is only a few hundred $s, hardly worth thinking about.

Those currently looking to buy a house up to $320k already get the stamp duty concession, up to $500k houses get smaller rates of rebate. Now the scale starts at $500k, so anyone looking to pay $400k - $600k for a house will get a good amount back in the rebate, only those FHBs paying exactly $500k will get the full benefit of this change. A pretty narrow band of buyers. I'm looking at paying $650k+, so no help for me.

I will still get some benefit from the OO's discount, but I don't think its much, a few hundred $s....

 

[Spectre]

A pro of it is also that say if you are doing a refinance, banks have a thing (very roughly speaking) where they can pay out the other lender prior to having to book the refinance in.

To clarify.
Say you have a loan at CBA. CBA wont approve your increase so you go off to westpac.
Westpac approves it and you do all the paperwork, send CBA the release authority and it takes a few weeks for things to go thru. This would be due to Westpac trying to transfer the stamp duty already paid on the mortgage to keep your costs lower (and cba trying to retain the business).

Process now is Westpac would do a thing called title insurance (which costs a few $) and they pay out the loan prior to CBA even finding out.

Then in due course they advise CBA and get the mortgage transferred over

The difference being you dont have to notify the outgoing lender of the release until after the loan is paid out, and you dont have to wait.

So if time is of the essence it might be a bit handy.

But it might be in line with making it easier to switch lenders. Also usually can only do it on variables.