OPPOSITION Leader Zed Seselja says the Government’s commitment to cutting stamp duty is “deceptive” and many first home buyers currently eligible for concessions would be worse off when purchasing an average priced home.

“Under ACT Labor’s plan, a young family living in Tuggeranong would have to buy a brand new home in a north side greenfields development to receive any stamp duty concession,” Mr Seselja said.

“Before yesterday’s Budget, this same family would have been eligible for stamp duty concession on established homes.

“And this hypothetical scenario reflects current practice. According to a Question on Notice, in 2008-09, 2466 first home owner grants were paid to the owners of established homes, while only 492 were paid to the owners of newly constructed homes. Clearly, first home buyers overwhelmingly purchase established homes, and they will not be helped under ACT Labor’s transparent announcement.

“ACT Labor has hidden their decision to cut stamp duty concessions for established homes behind the line that first home buyers will receive stamp duty concessions if they purchase a ‘substantially renovated’ home.

“‘Substantially renovated’ homes are expensive, and very rarely within the budget of a first home buyer. Most first home buyers look to purchase simple homes in established suburbs.”

Conveyancing Canberra director John de la Torre said the ACT government’s commitment to completely phase the duty out over 20 years is a step in the right direction, although the level of duty still presents a significant cost on any property purchase and this will continue well into the future.

“The cost of living in the ACT is fairly high and an increase in the threshold is a good initiative to assist more people into home ownership,” Mr de la Torre said.

He said the continuing disappointment with the stamp duty concession threshold was the lack of distinction between individuals and couples and the minimal allowance for families.

He said under the current criteria the income threshold applied per household with a modest increase of $3,600 per child.

“It seems to me that greater equity would be achieved by leaving the individual threshold at $120,000 whilst increasing the threshold for couples to $180,000, given a couple is only entitled to a single concession between them,” he said.

Mr de la Torre believes the greatest inequity applies to families, stating “the modest increment of $3,600 per child wouldn’t cover out-of-pocket child care expenses for a family let alone food and clothing”.

Mr de la Torre said the government should consider increasing the allowance for children to a more equitable level of $7,500 per child.

“The ACT Government’s commitment to reform conveyancing duty is positive, but greater equity for first home buyers could be instantly achieved by making the distinction between an individual on $150,000 per annum and a family of five on $160,800,” he said.

“The application of the threshold under the current system makes no sense and is inequitable.”

[box] According to the Opposition, under the old scheme (pre- June 5) a first home buyer of an established home, with a total income of under $120,000, if buying a $350,000 pre-exisiting home, would only pay $20 in stamp duty.Under the new scheme, from August 31, a first home buyer would pay $10,925 in stamp duty. [/box]