By Tim McKibbin, REINSW CEO
The Government's proposed First Home Loan Deposit Scheme assists eligible first homebuyers to buy a property with a five per cent deposit, as opposed to the usual 20 per cent.
Despite supporting first homebuyers assistance initiatives, influencing a free market can have adverse and unintended consequences, which will need to be identified and managed. The Government assumes the banks will cooperate – time will tell.
If the Government really wants to assist first homebuyers, it would remove the GST imposed on new residential property – which, along with Local and State Government taxes and charges, inflates prices by 40 per cent. Homebuyers are rightfully asking why it is so expensive to own a home. The answer is property taxes and supply.