{"id":7597,"date":"2019-03-10T09:57:13","date_gmt":"2019-03-09T22:57:13","guid":{"rendered":"https:\/\/www.catebakos.com.au\/?p=7597"},"modified":"2019-03-10T13:54:57","modified_gmt":"2019-03-10T02:54:57","slug":"chicken-and-egg","status":"publish","type":"post","link":"https:\/\/www.catebakos.com.au\/staging\/chicken-and-egg\/","title":{"rendered":"Chicken and egg?"},"content":{"rendered":"\n

When Bull markets turn Bear, the order<\/em> of how people upgrade<\/strong><\/em> their home changes. This, in turn can impact stock levels, particularly when aspiring Sellers don’t like what they see.<\/p>\n\n\n\n

I was asked to comment for The Age’s Domain this week about the apparent concern that our State Revenue Office has expressed in relation to diminished Land Stamp Duty tax collected in the past year<\/a> when contrasted to our prior, Bull market years.<\/p>\n\n\n\n

\"Stamp<\/figure><\/div>\n\n\n\n

“Boo hoo” I hear every purchaser say. Me included. Our Land Stamp Duty tax in Victoria is the highest in the nation, although the discrepancy between most states with the exception of SA and TAS) is not all that large. Circa~5% is the broad-brush amount* a buyer needs to provision if they are upgrading, down-sizing, or investing. It’s a tough tax for many.<\/p>\n\n\n\n

\"Stamp
Stamp duty across Australia’s States and Territories<\/figcaption><\/figure>\n\n\n\n

The issues with Land Tax are numerous though.<\/p><\/blockquote>\n\n\n\n

Firstly, the tax is not consistent among all buyers*. The absence of, (or subsidised amount of), Land Stamp Duty for eligible first home buyers up to a specific figure has segmented our market. Stock priced in this contingent’s spend-range is considerably more competitive than $750K+ properties.<\/p>\n\n\n\n

It could be argued that the introduction of this valuable waiver created an artificial price hike for the genre of properties impacted by the First Home Buyer Stamp Duty Concession<\/a>. The capital growth disparity between houses and units in the period since the full concession was introduced demonstrates what occurred in Melbourne when the Victorian Government doubled the concession in July 2017.<\/p>\n\n\n\n

Unit price growth outstripped house price growth for the twelve months that followed. <\/p><\/blockquote>\n\n\n\n

The other contingent who face a differing stamp duty treatment are foreign buyers. An additional 7% hike certainly adds some funds into the SRO’s coffers. Not to mention the Vacancy Tax<\/a> that foreign buyers contribute when their inner, or middle-ring asset is devoid of an inhabitant.<\/p>\n\n\n\n

Regardless of whether we think it’s appropriate or not, this tax can be very confusing. Throw different Visas and Kiwi’s into the mix, and solicitors will still scratch their head come settlement time.<\/p><\/blockquote>\n\n\n\n

Secondly, the tax is payable immediately (unlike HECS debts that are capitalised on low interest rate arrangements and paid off over a long period of time). <\/p>\n\n\n\n