The NSW State Government is “actively” considering a proposal to allow first homebuyers to pay off their stamp duty in a HECS-like scheme.
The proposal has been put forward by the Real Estate Institute of NSW in a bid designed to boost the sluggish property market.
It is one of several plans the REINSW has proposed and NSW Treasurer Mike Baird said the pay-as-you-go stamp duty scheme it was an “interesting idea”.
“I can specifically tell you that is under active consideration,” he told News Ltd.
In the scheme, purchasers would be able to pay off their tax burden over three years but the government would be “protected”, with stamp duty guaranteed against the property in the same way as unpaid land tax.
The REINSW also called on the government to slash red tape and apply stamp duty concession on homes purchased by residents over 65, to make it easier for the elderly to downsize their homes.
Since the removal of bonus grants, the stamp duty exemption for purchases under $500,000 and the discount for purchases between $500,000 and $600,000, first-time buyers now only have the benefit of the original $7000 federally-supplied First Home Owners Grant when buying a pre-existing property.
REINSW president Christian Payne said: “Housing supply and affordability are the key issues facing NSW and need to be tackled head-on in the upcoming state budget.”
“Convoluted planning controls are delaying the delivery of new housing stock, which is urgently needed to meet the growing demand of thousands of people flocking to live in Sydney.”
“Add to the already high price of real estate in Sydney the significant additional burden of stamp duty, and you have a market which is pushing the Australian dream beyond the reach of many,” he said.
Aussie’s founder and executive chairman Mr John Symond said while the proposed scheme looks good on paper, young buyers need to do their sums.
“I think you’ve got to be careful. Young, inexperienced buyers can easily get over their heads,” he said. “Australians have traditionally been better borrowers than savers. If first home buyers have the possibility to repay it in time then great, but I wouldn’t like to see it impede young people … by just deferring the inevitable.”
Pay as you go to help do your stamp duty