Good News–Stamp Duty reduction and Sustainability Declaration removal
The new Queensland Premier Campbell Newman has taken the first steps to reduce real estate red tape – including scrapping the much-maligned sustainability declaration forms, and reinstating transfer duty (stamp duty) concessions from 1 July 2012.
The transfer duty concession will apply, from 1 July, to all Queenslanders who buy a home that is their principal place of residence. First Home Buyers will also pay no duty at all on property up to $500,000. Queensland is the only State or Territory to offer this general concession to all ‘own home’ buyers. “Investors, however, will continue to pay the duties.”
Transfer duty, as it is now known, is levied on most property sales (with very few exemptions) and is based on the value of the property. The transfer duty rates formula is somewhat complex, so you can use handy online calculators to work it out.
As an example, on a $400,000 property in Queensland, an investor or trade-up home buyer would currently pay around $12,700 in transfer duties and fees. This is around $1,000 cheaper than in NSW.
The CEO of REIQ, Anton Kardash, said about the effect of these changes: “While activity has improved since last year, the promised reinstatement of the PPR concession on 1 July this year is unlikely to cause a noticeable change in activity between now and then.”
“The return of the concession will be a bonus for potential home buyers. However, the ideal situation is for transfer duty on property purchases to be axed completely, given it is an unnecessary impediment to the overall health of our property market.”
So it seems the State Liberals are taking some steps towards more affordability and easier transfers for frequent home movers, but they are not taking it further as a stimulator for real estate investment.
RMIT Professor Gavin Wood, having studied three options proposed by the Henry tax review, told The Australian last year that he supported changes to land tax and stamp duty as the measure that would most increase affordability in Australia’s property market.
Last year Professor Wood said that land tax and state stamp duty reforms would “slash inner-city land prices by 10%”. Whether it does or not is incidental, because these and other proposed tax reforms are considered “politically difficult” – i.e. they are probably not going to be approved.
State Treasurer and Minister for Trade Tim Nicholls says of the reduction of red tape: “We have begun the process to remove the ridiculous sustainability declaration, which added nothing but paperwork to house sales, and we are also streamlining home sale contracts and warning statements to simplify the process without removing safeguards.”
Kardash of the REIQ is eager to see more details from the State Government on these new reforms. “This form was just one example of the additional burden of red tape that is strangling the residential real estate transaction process,” he says. “The REIQ believes that the best way to reduce red tape in the property purchase process is the creation of a seller disclosure document.”
This document would include important information about the property such as pool safety issues, smoke alarms, safety switches, and reliable flood data. It would be available to buyers prior to a contract of sale being signed.
The REIQ believes their proposed document is a “much simpler option for both buyers and sellers”, and would prevent the problem of a buyer finding out relevant aspects of the property after the sale contract has gone through.
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