Builders in Victoria believe the government should scrap the first home buyers bonus, with the bonus only serving to line the pockets of real estate agents.
Instead the Master Builders Association of Victoria argues the money saved on the first home buyers bonus should go towards cutting stamp duty for new homes.
The Master Builders Association of Victoria, in its 2010 budget submission paper argues that first home buyers schemes do nothing to help housing affordability and simply add to the commissions paid to real estate agents without actually promoting the construction of new dwellings.
This is because the bonus applies to all houses, new or old. With the bonus simply ‘bidding up’ the price of houses across the economy by the amount of the bonus. With the bonus, funded by taxpayers, actually ending up in the pockets of real estate agents and existing home owners when they sell their properties.
The Master Builders Association of Victoria, instead wants the Victorian Government to cut stamp duty by $10,000 for new homes in Melbourne less than $500,000, with a cut of $20,000 for new housing stamp duty in regional areas.
“Its time the government gravy train for real estate agents came to an end,” Master Builders deputy executive director Radley de Silva said.
“Subsidising the purchase of existing homes does little to increase overall housing stock yet compounds our housing affordability problems.”
Moving from a subsidy to a tax cut is unlikely to increase housing affordability as buyers will factor in savings on stamp duty in much the same way they factor the first home buyers grant into their purchasing decisions.