Page 2592 - Week 09 - Tuesday, 25 September 2007
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should try to enter the housing market—they should not do so, however, by borrowing more than they can afford.
It is easy to be caught up in talk of a “crisis” but I believe that a broad approach, including looking at ACT government charges and taxes—not rash measures—is needed to make it easier for people to enter the housing market in the ACT.
Mr Speaker, this bill has three elements. Firstly, and probably most significantly, it amends legislation to allow households to defer stamp duty payments for up to five years and to pay the duty in instalments over the next five years. Stamp duty is an onerous burden on the purchase of property in the ACT. It is important that people budget for what will be, in most cases, a bill of around or often well in excess of $10,000.
People will still have to budget for stamp duty. It is important to note that this bill, while providing temporary relief at the point of entry to the housing market by deferring stamp duty for as much as 10 years, does not alter the amount that has to be paid. People need to be aware of that. If they are not careful they could face a massive deferred bill of both the original stamp duty and subsequent interest after the 10 years have passed. The analogy, of course, is in the ads that we see constantly in relation to furniture where they say, “Pay nothing for two years,” and then the poor souls who get caught up in those schemes suddenly find that they hit a wall when they have got to produce the funds down the track.
I understand from my briefing from Treasury officials—and I thank the Treasurer and the Revenue Commissioner and his officials for making information available and for formally briefing me on this bill—that residents will receive regular statements detailing the amount that they will ultimately have to repay. I am hopeful that the system that will be put in place will do everything possible to discourage people from overextending themselves.
I am not one who supports the nanny state, but, when you set up a scheme of this nature, there is a measure of risk involved for the people who avail themselves of the system, and they need to be very well informed of how this will work and what their ultimate obligations will be, lest people fall into the trap of entering into arrangements beyond their capacity.
This bill also amends legislation that will allow certain groups, like Community Housing Canberra, to be exempt from the payment of duty and land tax. I understand that this is consistent with the treatment of Housing ACT. Organisations will be able to receive exemptions if the minister is satisfied that the entity is a provider of community housing in the ACT. This is defined in the bill as housing provided for (a) people on low and moderate incomes or with special needs, or (b) non-profit community organisations.
The final initiative that this bill provides for is to amend the legislation to allow home buyers to only have to pay for the deposit on land until their home is ready to occupy. Purchasers of blocks of land will be able to defer full payment for the land and duty until they obtain a certificate of occupancy.
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