The move to withdraw the NSW First Home Buyers Choice scheme has been questioned by Australia’s leading buyer advocacy group.
Real Estate Buyer Agents Association (REBAA) president Cate Bakos said the scheme, which allows eligible first home buyers to make a decision regarding their tax obligations either by paying the traditional stamp duty or opting for a reduced annual tax, has not been given sufficient time to prove its worth.
“Sydney potentially, as the initial test case for this scheme, has not been given a sufficient amount of time to demonstrate its effectiveness,” said Ms Bakos.
“One of the key advantages touted by the government was the opportunity for buyers to have more flexibility when buying their first home.
“They could opt for the annual property tax now, and know that they had the opportunity to upgrade when the time was right rather than paying a hefty stamp duty and staying longer than necessary because of the cost burden.
“The ultimate proposal by the former government was to roll this out across all buyers, not just first home buyers, which would have promoted a more fluid market.
“A considerable number of homeowners currently hesitate to upgrade or downsize their properties due to the burden of stamp duty.
“The rest of Australia was watching on with interest and it’s a shame this initiative has been reversed in such a short timeframe.”
Ms Bakos said the practicality of the proposed new stamp duty concessions were also questionable when considering the limited availability of properties priced under $1 million in Sydney.
“While this may seem promising on the surface, it fails to address the core challenge faced by first home buyers: the lack of suitable properties within their price range,” she said.
According to Strand Property Group director, Michael Ossitt, many buyers were taking advantage of the property choice option in the $1 to $1.5 million price bracket while they can.
“I anticipate we’ll see a higher demand for properties in that price bracket in the lead up to 30 June but afterwards demand should return to normal,” said Mr Ossitt.
“Under the $1 million price point the competition is unlikely to change between either option, especially given the increase to the concession rate.”
