In a significant move aimed at making home ownership more accessible, Premier Steven Miles announced changes to Queensland's stamp duty on Sunday. These changes, expected to cost the state $350 million over four years, are part of Labor's pre-election budget, set to be released on Tuesday.
Key Changes for First Home Buyers
The most notable change is the increase in the stamp duty threshold for first home buyers. Previously, stamp duty was waived for homes up to $500,000. This threshold has now been raised to $700,000, with partial concessions available for properties valued up to $800,000. This change reflects the government's response to the rising property prices in Queensland, where the median house price has significantly outpaced the old threshold, which had been in place since 2012.
Premier Miles emphasized the importance of this change, stating, “The fact of the matter is, the best thing we can do for a Queenslander’s cost of living for their lifetime is help get them into their first home.”
Addressing Lost Revenue and House Price Inflation
To offset the expected loss in revenue and to address concerns about further inflating house prices, the government will implement a single percentage-point increase in stamp duty and land tax rates for foreign investors. Despite these increases, the rates will remain equal to or lower than those in New South Wales and Victoria.
Deputy Premier and Treasurer Cameron Dick highlighted that this measure is designed to minimally impact the market. He noted that only an additional 1800 transactions per year would be affected by the increased foreign ownership stamp duty. Dick explained, “We have tried, in a very careful fashion, to help first-time owners without exacerbating prices.”
Comparative Advantage in Brisbane
According to Dick, this adjustment means that properties worth up to 85% of Brisbane’s median price will be exempt from stamp duty for first-time buyers. This is a significant advantage compared to other major cities, with Melbourne offering exemptions up to 77% of its median price and Sydney up to 70%.
Reactions and Further Suggestions
The Real Estate Institute of Queensland (REIQ) welcomed the changes, with chief executive Antonia Mercorella praising the increased threshold. However, she suggested that the threshold should be higher and that it should also apply to those who have been out of property ownership for more than five years. Additionally, Mercorella advocated for first-time owners to be allowed to rent out a room in their property.
Conclusion
The changes to Queensland's stamp duty mark a crucial step towards making home ownership more accessible in a market where prices have been steadily climbing. By raising the threshold for first-time buyers and adjusting taxes for foreign investors, the government aims to strike a balance between affordability and market stability. As these changes take effect, it remains to be seen how they will impact the broader property market and whether additional adjustments will be needed in the future.