25% of first home buyers could buy home 3 years sooner if stamp duty was scrapped

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on November 18, 2020
25% of first home buyers could buy home 3 years sooner if stamp duty was scrapped

Photo by Toa Heftiba on Unsplash

New research has revealed first-home buyers could drastically fast track their homeownership plans if stamp duty was abolished.

Gateway Bank surveyed 700 Australians who intend to buy their first property in the next four years and found over 60% would be able to buy a home sooner if they didn't have to pay stamp duty. 

On average, first-home buyers (FHB) could buy a home 20 months sooner, while almost a quarter said it would reduce their homeownership timeframe by three years. 

When asked about the biggest obstacles to purchasing their first property, 32% of FHBs said stamp duty and other fees were too high, ranking this as one of the top three barriers.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

The research comes just a day after the New South Wales (NSW) government announced a proposal to axe stamp duty in favour of a land tax

Gateway Bank Chief Executive Officer Lexi Airey said a smaller yearly amount to pay in tax instead of a large upfront payment would be preferable to most first home buyers. 

“Stamp duty is a significant cost when buying a property, and can add years to the homeownership plans of First Home Buyers," Ms Airey said.

“While the NSW Government is proposing to replace stamp duty with a property tax, many first home buyers would be encouraged by any measure providing full or part relief from this upfront, one-off, cost.”

gatewayfhbs01

Source: Gateway Bank

Ms Airey added axing stamp duty could help FHBs who had experienced financial hardship as a result of COVID enter the property market.

“The proposed move to a new system stands to significantly fast-track the time to homeownership for first home buyers, and when combined with current government schemes, provides a range of support measures for those looking to get their foot on the property ladder.

"This will be particularly welcome news for many Australians who have had to utilise their deposit savings during the COVID-19 pandemic.”

Announced by the NSW Treasurer Dom Perrottet's budget speech yesterday, the proposal is designed to drive a post-COVID recovery. 

Buying a house in Sydney at the median price of $1,154,406 would cost roughly $48,795 in stamp duty. 

Mr Perrottet said axing stamp duty would remove one of the biggest hurdles to homeownership. 

"Stamp duty is a relic from a bygone era when you picked one career, started a family, bought a home and basically settled in for life," Mr Perrottet said.

"It adds tens of thousands of dollars to the cost of the biggest financial commitment most people ever make."


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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