From 1 July 2019, the ACT Government will abolish stamp duty for first home buyers (FHBs) earning under $160,000. This policy will effectively extend the existing scheme by extending concessions from new homes only to established dwellings and vacant land. Moreover, it will replace the existing $7,000 FHB grant.
With the median ACT dwelling valued at $587,583, according to CoreLogic, and the stamp duty on the median priced home currently $16,625, FHBs are looking at considerable savings even with the loss of the $7,000 FHB Grant. And if successful, the policy should counter some of the mortgage demand weakness afflicting the ACT:
Of course, such FHB subsidies are entirely self-defeating from a housing affordability perspective, and will merely push-up demand and prices, making affordability worse (other things equal).
