Stamp Duty changes to have little effect on Townsville Property Market

I will buck the trend here – the changes in Queensland stamp duty on the purchase of property will have no effect on  Townsville Real Estate sales volumes. I will come out boldly and say interest rates, and bank lending policies will play a greater part in Townsville Property Values going forward than a shift to apply in increased tax on a segment of prospective purchasers.

This is not say that out of fear buyers did not bring their plans forward and with August traditionally a quiet month in Townsville Real Estate their could be a slight hiccup. But I am willing to predict that if interest rates fall by Christmas the market will show it has stabilised and we close to the bottom of the market.

Despite agents talking doom and gloom about the increase in costs the arguments are totally irrational !

Why -= because it will only effect a small number of buyers.

Let’s look at it rationally – the stamp duty increases do not effect first home buyers, land buyers or investors. They only effect second home and beyond buyers – who know what they paid before and who do not come from interstate.

Ask yourself the question – how mush ctamp duty did I pay when I purchased my home – most people could not remember !

The interstate buyer is is the big point – if you move from NSW QLD or Victoria you still pay less in most cases than if you purchased in your home state !

So if you know no difference (look how people quickly adapted to the GST) then it will quickly become the norm.

Here is an excerpt from an email sent to me Gary Thompson of Definitive Finance on the Sunshone Coast. Gary is an ex Commonwealth Bank Mobile Lender in the ealry days with me and has been in finance brokerage for many years.

This is couurtesy of  “Which Property”.

 

In the 2011-2012 budget announcement, the Queensland government has revealed its plans for revenue reforms when purchasing property, which will commence 1st August 2011. The legislation is currently being drafted and this is a summary of the proposed changes.

TRANSFER (STAMP) DUTIES

Stamp duty is fundamentally a tax for the transfer of a property which you pay to the state government when you buy your property. The revenue reforms will mean that transfer duties will change in Queensland.

Owner Occupiers
The changes to stamp duty through the reforms will mostly affect owner occupiers looking to upgrade their principal place of residence. If you are in this category, the Home Concession, a discount in Queensland on stamp duty for owner occupiers will end on 31st July 2011.

What does this all really mean?

Let’s say you are buying a property after 1st August 2011, and you intend to use it as your principal place of residence:

Property Value $450,000: Stamp Duty*

Victoria
$18,970
New South Wales
$15,740
Queensland
$13,575

Under the new rules, stamp duty for owner occupiers will increase substantially in Queensland. However, it can be seen that the rate is still competitive with counterparts such as New South Wales and Victoria. In saying this though, it is definitely a most unwelcome move which will deter Queensland residents from changing their principal place of residence as frequently.

GRANTS

$10,000 Building Boost!
On a brighter note, in an effort to stimulate the housing construction sector, the Queensland Building Boost Grant will be available for the next six months, commencing 1st August 2011. This will entitle both owner occupiers and investors to a $10,000 grant upon building or buying a brand new residence (house, townhouse or unit) under the value of $600,000.

First Home Owner
First home buyers will still be eligible for a concession on stamp duty, the $7,000 first home owner’s grant plus the new $10,000 Building Boost (subject to the purchase price of the property). This means, if you are a first home buyer you could be eligible for a total of $17,000 in grants and a concession on stamp duty!

More information about the Queensland stamp duty changes and grants is available on the Queensland budget website.

To take advantage of these upcoming changes visit our website where we have a variety of brand new properties available under $600,000 in Queensland: www.whichproperty.com.au.

Regards

 

Mark Borrill
Managing Director
Which Property

*This guide is an estimate from data available from the relevant State Revenue Offices and does not take into account any available bonuses, grants or concessions. This is subject to change pending the written legislation for Queensland.

Food for thought ?

More to come on my tip for interest rate movements going forward in my next blog.

Graham Lynham

 

 

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