Legislative Assembly for the ACT: 2018 Week 02 Hansard (Wednesday, 21 February 2018) . . Page.. 493 ..
exemption schemes in place, but it is fair to observe that the eligibility thresholds often lag behind the real price of a home, particularly in the New South Wales and Victorian markets.
Scrapping stamp duty for all first homebuyers can be achieved in a way that is affordable by removing the first home owner grant scheme at the same time. These grants no longer serve the purpose for which they were created and arguably now make housing less affordable. By working to abolish first home owner stamp duty and grants across the nation we can deliver a far more effective form of support to Canberrans and, indeed, Australians.
MS CHEYNE: Chief Minister, how will cutting stamp duty, while ending the payment of special grants, make homebuyers better off?
MR BARR: It will end the money merry-go-round where state and territory governments, channelling a commonwealth policy, hand out grants and then take them straight back in stamp duty. The Productivity Commission and many economists have noted that first homebuyer grants fuel price growth by adding many times their dollar value to the borrowing power of purchasers and distorting decisions about where and what property people buy, channelling demand into particular segments of the market, which drives up prices further.
Mr Coe interjecting—
MR BARR: Instead of grants benefiting first homebuyers—
Mr Coe interjecting—
MADAM SPEAKER: Mr Coe, you will have a chance to ask a question.
MR BARR: they simply end up being handed over to first home sellers. First homebuyers will be better off under the proposal I have put forward because they would receive an exemption from stamp duty no matter what kind of property they buy. They would not have to find additional funds to pay their stamp duty bill after buying and they would not face higher monthly mortgage repayments or a bigger lifetime cost of borrowing. This is a good reform that will build on the work that we are already undertaking here in the territory to abolish stamp duty for all buyers.
MS CODY: Chief Minister, what steps will the ACT government be taking to progress the removal of stamp duty for first homebuyers as a national reform?
MR BARR: The government is prepared to progress this reform in the ACT with the acceleration of removal of stamp duty specifically for first homebuyers ahead of our broader phase-out of the tax. I have written to each of my state and territory colleagues asking them to consider doing the same. We will be putting this on the agenda for the next meeting of the Board of Treasurers because this is an idea that would be best seeing all jurisdictions moving together.