Friday, 03 March 2017
Labor’s first home grant change a win for developers
Labor’s changes to the first home owners grant will benefit property developers, not first home buyers.
Increasing the grant by $10,000 in regional Victoria will only tend to push up prices, seeing higher profits for developers.
The Productivity Commission has warned about the effect of such proposals, noting:
“Measures that increase purchasing power will tend to increase house prices, particularly if there is limited capacity to augment supply in response to the ensuing increase in demand. This will benefit existing home owners at the expense of those seeking to purchase, including first home buyers”.
(‘First Home Ownership’, Productivity Commission, March 2004, page 214)
Under the former Liberal Nationals Coalition, first home buyers had their stamp duty halved.
Since Labor was elected, Victorian stamp duty has soared by $1,283 million (29%) while land tax has risen by $609 million (35%).
Quotes attributable to Shadow Treasurer, Michael O’Brien:
Property developers will be rubbing their hands together at today’s announcement. This extra grant will just feed into higher house prices that won’t benefit first home buyers.
Unlike the Liberals Nationals who halved stamp duty for first home buyers, Labor has hiked property taxes.
Daniel Andrews has used Victorian home buyers as cash cows, ripping nearly $2 billion in extra property taxes since the election.
Labor’s high taxes and planning red tape are hurting housing affordability. Changes to the regional first home owners scheme cannot undo the damage that Labor has done.