FIRST NATIONAL SAYS STAMP DUTY TOO TAXING

February 24, 2011 Leave a comment

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First National Real Estate Lakeshores Principal, Mark Millington, has joined the voices calling for a reform of state taxes, particularly inefficient ones like stamp duty, saying it is proving too taxing for working families to pay.

“Stamp duty has become nothing more than governments gouging money from those who can least afford to pay – working Australian families,” Mark Millington said.

“Australia has already proven to one of the most expensive property markets in the world and excessive property taxes, like stamp duty, is making it incredibly difficult for new entrants to gain access to the market or for existing home owners to upgrade.”

According to two independent studies, the Demographia International Housing Affordability Survey 2011 and the Housing Industry Association’s most recent survey, residential property in Australia has become increasingly unaffordable.

According to Mark Millington, the situation with the Australian property market is becoming untenable and needs to be addressed at a national level.

“We have a chronic shortage of supply, worsening home affordability and an increasingly tight rental market, which could all be partially addressed with a more realistic approach to property taxes, such as stamp duty,” Mark Millington said.

“In some cases, the one home and land package, could be levied three times with stamp duty. I can’t think of another situation where the one item can be taxed three times.”

“The people who come off the worst in this situation are hard-working Australian families.”

Mark Millington said that at a time when rents are soaring, vacancy rates are tight and there is a shortage of supply, there is a real potential that more Australian families will be forced onto the streets – increasing homeless rates and welfare payments and further adding economic stress to the Australian economy.

“Serious consideration needs to be given to addressing the problems with the Australian property market if there is going to be hope for future Australians to realise home ownership dreams,” Mark Millington said.

“Plus, as the Henry Review points out, transaction taxes such as stamp duties reduce economic efficiency, either by discouraging turnover or being embedded in the cost of production, which just increases the problem.

“Inefficient property taxes including stamp duty are now the biggest single non-income tax generator of cash for Australian governments and the Commonwealth needs to act to reduce the states dependence on these taxes.

“An ideal opportunity presents itself at the federal tax summit which we expect to be held in the middle of this year – let’s just hope the governments don’t find the whole matter too taxing.”

Issued by: First National Real Estate

For further information, contact Mark Millington, Principal, First National Real Estate Lakeshores, on 02 4359 1555.

Filed under Media Releases, Opinion Tagged with , , ,

Bank on leaders working together for affordable homes

December 13, 2010 Leave a comment

First National Real Estate Lakeshores says the recent interest rate hikes demonstrate the increasing need for Governments and the Big Four Banks to work together to address the key issues of supply and demand and housing affordability.

“There seems to be so much debate going on about the market, but no real communication between the banks and the government, and between them they are the ones with the power to fix the property market problems,” Mark Millington from First National Real Estate Lakeshores said.

“There is lots of finger pointing going on, but there is not any real discussion about what we can do to fix it.”

“At the end of the day it is the home buyers and owners who suffer, while the banks keep making record profits and governments keep their heads in the sand,” Mark Millington said.

“What they should be doing is looking to influence affordability and supply by reducing or abolishing stamp duties, abolishing exit fees, introducing more competition into the banking sector and looking at policies that will stimulate the construction industry.

“Instead, we keep putting up with inaction from the government and greed from the banks.”

Mark said he was particularly unimpressed by banks who deemed it appropriate to increase their standard variable rates by as much as 14 basis points above the RBA increase.

“What is most disconcerting about this is that it seems each of the banks are taking their turn at being the bad guy and being the first to lift their rate higher than the RBA increase,” Mark said.

“As one consumer interest group spokesperson said, if all the banks moved at the same time by the same amount, and this was a horse race, you would have a steward’s inquiry.”

But not even the prospect of a Senate enquiry into banking competition, or Parliamentary debate on legislation forcing banks to lift rates by no more than the RBA, is enough according to Mark Millington.

“Interest rates on their own are not the problem. We need to have a look at all the factors affecting the property market: planning approvals, interest rates, fees and charges, everything all at once rather than this piecemeal approach,” Mark Millington said.

“New banking policies are called for but so is a national approach to planning, because ultimately it is the “mum and dad” property owners who will suffer the most.

“We need political leaders who have the fortitude and imagination to reform property taxes and the banking sector if there is any hope of addressing affordability issues.”

Filed under Media Releases, Opinion Tagged with , ,

CAN RENTING BE BETTER THAN BUYING?

March 26, 2010 Leave a comment

Current market conditions, coupled with growing concerns over housing affordability, are causing uncertainty for home buyers who are wondering whether they should continue to rent or commit to buying their own home.

Mark Millington, Principal from First National Real Estate Lakeshores says it all comes down to what suits the individual’s personal and financial situation best.

“With property prices and interest rates continuing to increase, mortgage repayments are beginning to be beyond the reach of many young Australians,” Mark said.

“But they shouldn’t panic.  Renting offers great flexibility with the option to relocate from home to home and area to area as the need arises, which is not the case with buying a property.

“If finances get tight, or the home situation changes for any reason, it is far harder to just pick up and go if you own your own home.

“Renting is also often a cheaper alternative to buying, especially in the inner city areas particularly favoured by Gen Y-ers who want that urban lifestyle close to where they work.”

While the housing supply and demand equation will continue to put pressure on vacancy rates, the fact remains that monthly rental payments will usually be less than a mortgage repayment for a comparable property.

“One of the greatest advantages of renting is that maintenance costs, repairs, rates and insurance bills are the responsibility of the property owner, and not the renter,” Mark said.

Despite these many advantages of renting a property, there are some disadvantages which will make buying preferable.  The most obvious one being that when you rent, you can never really put your own personal stamp on the property or make it reflect your individual style and design preferences.

“There is also the inconvenience, and in some cases pressure, of knowing your landlord can inspect the property whenever he/she wishes (providing they give sufficient notice) invading your privacy and peace of mind,” Mark said.

“But the biggest disadvantage is that you will never pay the property off, as you do with your own home.  You will always have to pay rent and therefore the money is lost for good, without any chance of recuperating it in the sale of a property.”

Ultimately, this is where the biggest difference is between renting and buying.  An individual needs to consider which will make the greatest impact on their personal net wealth and cashflow over their lifetime. 

“Usually, this will be purchasing a home, but it will come down to making sure you buy well and that you buy right,” Mark said.

“This is where the advice and assistance of a real estate agent comes into its own.  We have the necessary knowledge, experience and skills to understand the market, its trends and its weaknesses and opportunities and it is what we pride ourselves on. Despite the end of the boost to the First Home Owners Grant, it’s important to remember that the First Home Owners Grant still exists as well as many additional state Government financial incentives.

“So home buyers need to learn to make the most of the services we have available, so that they can make the most of their finances over the long term. There are many creative ways in which home buyers are saving for that first purchase whilst renting and we can help explain the options available.”

Filed under Media Releases, Opinion, Q&A Tagged with , , , ,

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