First Home Purchaser's buying residential property up to $750,000.00 could be given an option to pay stamp duty over instalments over a five year period.

By Mohammed Algalele March 10, 2015

The ALP has proposed that they will introduce a new stamp duty policy where purchaser's buying residential property up to $750,000.00 could be given an option to pay their stamp duty over instalments arranged over a five year period.

Although Premier Mark Baird has labelled the promise as not practical in terms of application, Mr Foley has suggested that if Labor wins the next March 28 Election, the new Stamp Duty policy will come into effect on the March 28 Election.

The move comes as Labor argues that the housing market is becoming very competitive making it very difficult for the average Australian to enter the market.

Stamp Duty is a tax imposed on home purchasers, calculated using state calculations. In a hypothetical scenario, where a fictitious person is purchasing a house at the average home price of $671,000.00, the stamp duty payable would be $26,006. This fee if paid through instalments over a five year period would lessen the burden on home owners. From an economic perspective, such a move would give rise to more home purchasers.

This could alleviate the much feared "Housing Bubble" arising out of increased Foreign investment in Australia and other factors. From a borrower's perspective, the deferral of the fee over a five year period would ease the burden on the borrower who can now use these fees for the deposit in an ever increasingly competitive market.