Sunday Mail

 

Mortgage duty dropped
Darrell Giles
June 03, 2007 12:00am

HOME buyers will be the big winners in Tuesday's State Budget with an average $1000 coming off the cost of buying a property.

Deputy Premier and Treasurer Anna Bligh will dangle a "housing affordability" carrot in her second Budget by announcing the State Government will abolish mortgage duty.

It will be a two-step process: 50 per cent coming off from January 1 and the remaining 50 per cent by January 1, 2009.

Mortgage duty is a State Government tax charged on property mortgages. The move will cost the Government about $435 million a year.

First-home buyers are already exempt from mortgage duty on mortgages up to $250,000, and are taxed at a lower rate on larger amounts.

But for non-first-home buyers and investors, there will be extra money in the pocket from next year.

On the average Queensland mortgage of $320,000, the initial saving will be $500, which will double to $1000 in 2009 when the duty is abolished.

On a $500,000 mortgage the initial saving will be $860, then $1720. For investors it's even better, with $1000 off next year, then $2000.

Ms Bligh said the savings in investment mortgages would mean good news for the depressed rental market.

"We are working to keep the dream alive. This puts money back into home-buyers' pockets," she told The Sunday Mail yesterday.

"This is not just for all home-buyers. It applies to business as well."

Other states have already made similar moves. Victoria abolished mortgage duty in 2004, while Tasmania will do so on July 1.

Western Australia halved the rate last year and will abolish it by July 2008. NSW will halve it by 2010 and abolish it in 2011. South Australia will reduce it by a third each year from July 2007.

Ms Bligh said it was one of the most significant changes to buying property in Queensland.

"Anyone who buys a home knows what it is like with additional costs – the likes of solicitor's fees, stamp duty and mortgage duty," she said.

"From 2009 mortgage duty won't exist."

About 12,000 first home buyers had taken advantage this year of a Labor election promise on stamp duty.

"Now we go another step further," Ms Bligh said.

"The abolition of mortgage duty and stamp duty gains are part of the Beattie Government's strategy to tackle housing affordability."

She said further measures to make home ownership more affordable would be announced in coming months.