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The 2013/2014 Victorian state Budget will benefit the property market at the expense of first home buyers, according to the Real Estate Institute of Victoria (REIV).
REIV CEO Enzo Raimondo said the Budget would improve economic growth and stimulate market activity.
“This year’s Budget aims to deliver the most important thing for the property sector: economic growth at healthy and sustainable levels,” Mr Raimondo said.
“Increased employment and a higher gross state product (rising from 1.5 per cent to 2.75 per cent) will result in households being more confident, and this will provide a boost to transaction levels and prices.”
While the abolition of the First Home Owners Grant for existing homes will see a saving of $63.3 million in the next financial year and $402.8 million over the forward projections, it comes at a cost to first home buyers.
“The acceleration of the stamp duty cuts to 40 per cent does not cover the cost to the majority of first home buyers of the grants abolition. The state government should have matched the cuts in the grant with further reductions in stamp duty,” Mr Raimondo said.
"In addition to an improved economy and adequate levels of dwelling supply, the most important thing the state government can do for first home buyers is progressively increase stamp duty cuts to 100 per cent.”
On top of the current initiatives, Mr Raimondo said the reform of a range of property taxes, land tax and stamp duty is needed to stimulate further economic growth.
Budget is defined as the estimation of expenses made over a specified time for the purchase of goods or services.
Stamp duty is a tax imposed on the purchase of a property based on its price, location, and loan purpose.