Vic coalition wins stamp duty bidding war

The vast majority of Victorian home buyers would be worse off under a re-elected
Labor government.
Only about 16,000 first home buyers are expected to benefit from Labor's surprise
election week pledge to scrap stamp duty on newly built homes in regional Victoria.
While the policy is a potential windfall for a small handful of eligible home
buyers, most would be stung more in stamp duty as the government continues to profit
from rising property prices.
The cuts would cost government coffers $115 million over four years, against a
forecast stamp duty take of more than $15 billion.
In contrast, the coalition's 50 per cent stamp duty cut would apply to all first
home purchases, up to $600,000, across the state.
The opposition estimates the $750 million plan would benefit about 160,000 first
home buyers over four years.
As stamp duty was thrust into the spotlight less than a week before the election,
the coalition appeared to have won the bidding war.
But Labor's more generous proposal for a niche group of home buyers may prove
popular among young voters in key regional seats.
In an almost 30-minute press conference, Treasurer John Lenders refused to say
exactly how many home buyers would directly benefit from Labor's stamp duty promise.
It was left to Premier John Brumby a short time later to admit that it would be just
4000 a year out of about 67,000 owner-occupier purchases.
Mr Brumby said the policy was not just about helping first home buyers but also
about stimulating the construction industry and creating jobs.
"We've got housing shortages, and the way you lift the level of housing supply is by
providing more benefits for newly constructed homes," he said.
Opposition Leader Ted Baillieu said his stamp duty cuts would be phased in over four
years to prevent an interim freeze in the first home buyers market.
Stamp duty would be cut by 20 per cent from July 1 next year and a further 10 per
cent in January 2013, January 2014 and September 2014.
"We believe this is a really essential step to ease the burden for families and make
housing more affordable for first home buyers," Mr Baillieu said.
Victoria has the highest rate of stamp duty in the country.
First home buyers in NSW, Queensland and WA pay no duty.
Both major parties have promised to retain the state first home bonus, worth between
$7000 and $26,500.
Labor has also pledged to lift the stamp duty concession threshold for seniors,
which will benefit about 9000 home buyers over four years, while the coalition has
promised stamp duty exemptions for young farmers.
Real Estate Institute of Victoria chief executive Enzo Raimondo said Labor's plan
would do little to ease housing affordability, with 70 per cent of first home buyers
buying established houses in metropolitan areas.
"On balance, if you compare the two policies, the Liberal Party is the most generous
for first home buyers in Victoria," he said.
Master Builders Association executive director Brian Welch welcomed both policies,
but said the first home bonus should be scrapped in favour of permanent stamp duty
relief.