Stamp duty costs accelerating
The Housing Industry Association has warned of stamp duty bracket creep, calling the situation unsustainable.
The group’s Stamp Duty Watch report found that stamp duty bills have increased nearly three times faster than house prices since the 1980s.
"In Victoria, the typical stamp duty bill increased from 1.9% to 5.2% of the median dwelling price between 1982 and 2017 – equivalent to a surge of 4,000% in the cash value of stamp duty. NSW homebuyers fared little better with the stamp duty burden rising from 1.6% to 3.8% over the same period," HIA senior economist Shane Garrett said.
Garrett said stamp duty bills were accelerating because stamp duty brackets are seldom updated. He pointed to NSW, where he said stamp duty rates had not been reformed since 1985 when the average house price was $70,000.
"State governments are compounding the housing affordability crisis. Total stamp duty revenues have almost doubled over the past four years: from $11.7 billion in 2011/12 to $20.6 billion in 2015/16 – most of which is likely to have come from residential building. State governments are now more reliant on stamp duty revenues than at any time for a decade. This trend will continue unless state governments recalibrate their taxes on housing," Garrett said.
Garrett argued that the reliance of state governments on stamp duty revenues was not sustainable.
"By draining the pockets of homebuyers to the tune of over $20 billion each year, stamp duty is a central pillar of the affordability crisis. A long plan to do away with the scourge of stamp duty would be a huge victory for housing affordability in this country," Garrett said.