Stamp duty burden grows for Australian families

Sydney, Australia

The stamp duty burden is growing heavier for families in Australia, reveals new research.

A report from the Housing Industry Association reveals that the levy is now costing the average family over $1,200 in additional mortgage repayments each year – the equivalent of $100 every month.

The is largely driven by strong hosue price growth, which has resulted in “disproportionately larger” rises in stamp duty bills for buyers.

Based on dwelling prices during November 2016, the typical stamp duty bill nationally is $19,975 which is an increase of 7.4 per cent on a year earlier. The average stamp duty bill is currently highest in Victoria ($28,538), followed by NSW ($24,965) and the Northern Territory in third place ($20,805). The stamp duty bill on the purchase of a median-priced home is $17,960 in the ACT, $15,830 in South Australia and $15,390 in Western Australia. Queensland remains the state with the lowest stamp for a typical purchase ($6,825) followed by Tasmania ($9,135) with the second lowest stamp duty cost.

“Stamp duty is now setting ordinary homebuyers back by an average of $19,975. This eats up home purchase deposits and forces families to take on much larger mortgages, with total loan repayments typically rising by around $36,000 over a 30-year term,” comments HIA Senior Economist, Shane Garrett.

“The cost is even greater when the impact of the higher Lenders’ Mortgage Insurance premiums is added on top,” he adds.

The HIA is calling for stamp duty relief to be considered by the state, arguing that the cost acts as a barrier to employment mobility as well as retirement downsizing.


Australian stamp duty hits families as well as foreign buyers

27th July 2016

Australia’s stamp duty is hitting families as well as foreign property buyers, new research reveals.

Stamp duty on home purchases cost ordinary Australian families over $90 every month, according to the Housing Industry Association, the voice of Australia’s residential building industry.

During June 2016, the typical stamp duty bill was $17,811 for a non-First Home Buyer owner occupier, according to the HIA’s report, which added another 3.6 per cent to the cost of purchasing a home. This means that stamp duty eats up almost four months’ worth of after tax income.

“Today’s report from the HIA exposes the true impact of stamp duty on families,” explains HIA Senior Economist, Shane Garrett.

“By eroding deposits and making homebuyers borrow more, stamp duty is estimated to add $91 per month to household mortgage repayments for a median priced home.”

The HIA also argues that stamp duty for foreign buyers is also restricting economic activity and “[obstructing] the national dwelling stock from achieving its full potential”.

Indeed, New South Wales recently joined Victoria and Queensland in introducing stamp duty surcharges on foreign investors in the country’s real estate. Foreign investors are now subject to a 4 per cent stamp duty surcharge and, from 2017, will also face a 0.75 per cent land tax surcharge.

“Including the new FIRB application fee, foreign investors in Australia’s biggest rental markets now face major costs on entry. This is most severe in Melbourne, where the purchase of the typical unit involves almost $65,000 in stamp duty and fees. The situation is not much better in Sydney, with foreign investors hit for over $58,000 on the acquisition of a unit of average price,” comments Garrett.

“Under the new rules, foreign investors in Brisbane units will be charged $29,000 in transaction taxes alone. Foreign investors act as key tenet of supply to the rental markets in Australia’s largest cities and conditions would be much tighter in their absence. These additional costs will act as a deterrent.”