Sydney and Melbourne buyers locked out by stamp duty costs
Stamp duty is proving a stumbling block for Sydney and Melbourne homebuyers.
New analysis from CoreLogic shows the average stamp duty bill in Sydney now sits at $31,723 for first homebuyers, non-first home buyers and investors. In Melbourne, the stamp duty impost on first homebuyers is smaller, at $17,145. But non-first homebuyers and investors face an average bill of $32,680.
“Because stamp duty costs are percentage based, as dwelling values move higher, stamp duty costs can rise disproportionately faster due to bracket creep. Over the past five years dwelling values in these two cities have increased by 62% and 38% respectively which implies at least a commensurate rise in stamp duty costs in these cities. The high transactional costs associated with housing are likely to be one factor that is contributing to a slowdown in the number of sales across the country,” CoreLogic head of research Tim Lawless said.
Lawless said stamp duty was generally the largest transactional cost associated with buying, but that buyers faced a variety of other cost barriers, such as building and pest inspections, conveyancing, removalists and other costs.
“Add to this the fact that most lenders will be seeking a 20% deposit, and the barriers to entry become even more substantial,” he said.
The high cost of stamp duty could come back to bite state governments as well, Lawless suggested.
“If transaction numbers across the housing market continue to trend lower, state governments are likely to encounter a budget hole as stamp duty revenue falls. For this and associated reasons, we may find state governments become more serious about considering a broader based land tax that is applicable to all property owners rather than a stamp duty that is payable only across the small percentage of properties that transact each year.”