Stamp duty costing buyers over five times more than a generation ago
A new report has found stamp dutyis costing buyers over five times more than what it did just one generation ago.
Stamp duty for a median-price $1.11 million home in Sydney now costs about six months of full-time income after tax, a joint PropTrack and e61 Institute report has found.
That is about $44,500, which is equivalent to about 5.4 times higher than the $1500 or 1.1 months of full-time post-tax income in the mid-1980s.
Melbourne had the largest increase of any city when its stamp duty rose up 6.1 times to $42,500.
In Brisbane, it costs four months of income of about $25,900.
Homes cost 4.4 times more relative to income in Adelaide, 4.5 times higher in Perth and six times more in Hobart.
According to the report, the rise has largely been incidental rather than intentional.
“Home prices have grown faster than incomes, and stamp duty brackets have not kept up with growing prices,” the report said.
The mammoth upfront cost is consequently acting as a barrier for those wanting to enter the housing market but for Australians already struggling with the crippling cost of living, the impact is even more dire.
According to the report’s survey data, housing costs have caused a quarter of those aged under 40 to delay changing jobs.
More than one in five aged between 30 to 40 have been forced to delay having children.
And people of all ages reported feeling prevented from moving home.
Research showed preventing job switching can weaken productivity which has flow-on effects on wage growth and inflation, e61 Institute research manager Nick Garvin said.
“Overhauling the current stamp duty system has the potential to alleviate these pressures on individuals and the economy more broadly,” he said.
The research concluded stamp duty was an “inefficient tax” after it found more than a third of Australians surveyed wanted an end to stamp duty.
“The most popular housing policy for state governments is to abolish stamp duty,” the report said in its key findings.
