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State governments have been urged to scrap stamp duty in light of new research, which has highlighted its impact on housing affordability.
Last week, property research group CoreLogic released its 2019 Perceptions of Housing Affordability report — which includes the findings of a survey of 2,220 Australians aged between 18-69 — revealing that 83 per cent of non-property owners are still worried about being able to afford their first home, despite the recent fall in home values.
The greatest obstacle to homeownership cited by respondents was securing a deposit (47 per cent), followed by receiving approval for a home loan (45 per cent), and stamp duty costs (44 per cent).
Reflecting on the research following the release of the report, CoreLogic’s head of research, Tim Lawless, called on state governments to scrap stamp duty as a means to lightening the financial burden associated with entering the property market.
Mr Lawless encouraged state governments to follow the ACT’s suit by introducing a land tax as an alternative to transaction-based measures that are heavily influenced by trends in the housing market.
“In some markets, if you're not a first home buyer (FHB), or don't satisfy the criteria for a stamp duty concession, you're paying around $30,000 just to make a transaction in the marketplace,” he said.
“The fact that we've only seen one of our states and territories starting to transition away from stamp duty is still pretty baffling to me, particularly when you see state governments moving through the fluctuations and the ebbs and flows of the marketplace, which has a profound impact on stamp duty revenues.”
In July, the Housing Industry Association (HIA) released its Stamp Duty Watch report, which revealed that home buyers paid $18.9 billion in stamp duty across Australia in the 2018-19 financial year, down from $21.3 billion the previous year.
According to the HIA, majority of the reduction in stamp duty revenues is “due to the downturn in the housing market”, which has been marked by a decline in the value of dwelling approvals, falling home prices and a drop in home loan approvals.
Affordability refers to a product or service that is inexpensive and accessible for people with limited means.
Housing affordability refers to the cost of housing that is relative to the disposable income of a renter or buyer.
Stamp duty is a tax imposed on the purchase of a property based on its price, location, and loan purpose.