There have been calls for a review of property taxes following the release this week of a report showing stamp duty has increased almost three times faster than house prices since the ‘80s.
The Housing Industry Association’s annual Stamp Duty Watch report revealed that in Victoria, the typical stamp duty bill increased from 1.9 per cent to 5.2 per cent of the median dwelling price between 1982 and 2017 – equal to a surge of 4,000 per cent in the cash value of stamp duty. NSW homebuyers fared little better with the stamp duty burden rising from 1.6 per cent to 3.8 per cent over the same period.
HIA Senior Economist, Shane Garrett explained that increases in home prices cause stamp duty bills to accelerate because stamp duty rate brackets are rarely updated.
“In NSW, stamp duty rates have not been reformed since the average house price was $70,000 (1985)”, Garrett said.
“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.”
Garret suggested that state governments are now more reliant on stamp duty revenues than at any time for a decade, adding that this trend will continue unless state governments recalibrate their taxes on housing.
“The situation is not sustainable”, he said.
“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.”