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Stamp duty overhaul may not be enough

By Vivienne Kelly
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A recent survey of lenders and mortgage brokers revealed many of them would like to see stamp duty removed or reduced in order to stimulate the housing market, but others contend the measure would simply be a Band-Aid solution.

The Genworth Home Grown Report surveyed over 300 mortgage brokers and lenders and asked: ‘If state or federal government could make one change to benefit the mortgage industry over the next five years, what would it be?’

Over 40 per cent of lenders and 30 per cent of mortgage brokers said the removal or reduction of stamp duties would be the most effective measure – well ahead of the next most popular choice ‘reinstate/increase incentives for FHBs [first home buyers]’, which 11 per cent of lenders and 17 per cent of brokers selected.

Speaking at Genworth’s launch of the report this morning, however, panellists agreed that stamp duty concessions would not address the raft of issues facing first home buyers and investors who are priced out of various capital city markets.

James Hickey, financial services partner at Deloitte, said that if stamp duties were removed or reduced, state governments would scramble to acquire the revenue from other sources.

He said this revenue was vital for undertaking infrastructure projects, which encourage people to live in certain areas.

Mr Hickey suggested introducing land taxes may be a more equitable way to reduce pressure on people who are buying, but still enable governments to maintain their revenue.

John Symond, executive chairman of Aussie, said the stamp duties are a small part of the problem.

“There’s no silver bullet here. It’s a very complex problem,” he said. “Stamp duty, to cut or give concessions further, it’s just a Band-Aid job. Government grants are just a Band-Aid job. We’re not addressing the fundamental problems of why we’re having housing affordability issues.”

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