Stamp duty slogs buyers up to 6x what it did in the ’80s

New data has shown some home buyers are spending six months of the average worker’s full-time income on tax.

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Stamp duty costs are affecting people’s choices to buy, sell and move, with new research by e61 Institute and PropTrack stressing that the cost of stamp duty is acting as a significant upfront cost and a barrier to entering the housing market.

Currently, home buyers are paying six times the amount than a generation ago, which was around $1,500 in the 1980s.

For Sydneysiders and Melburnians, stamp duty costs close to $45,000 for a median-priced home, which is equivalent to six months of average full-time income.

In Brisbane, the burden is lessened with owner-occupiers paying less due to concessions. However, for an investor, stamp duty still represents on average $25,900 cost or 3.7 months of income.

Weighing in on the data, PropTrack senior economist, Angus Moore, said: “Home prices have grown faster than incomes and stamp duty brackets have not kept up with growing prices.”

The Stepped on by Stamp Duty report stated: “There is no specific policy change to blame, just housing prices outpacing income as well as stamp duty bracket creep. State government budgets have benefited from the growing tax revenue.”

Research manager at e61 Institute, Dr Nick Garvin, said there are indirect impacts of stamp duty on other parts of people’s lives, with research showing that for tax payers, the toll is more than just time and money.

According to the report, “housing costs caused one quarter of Australians under 40 to delay changing jobs. They have caused more than one in five 30- to 40-year-olds to delay having children, and are preventing people of all ages from moving homes”.

While acknowledging stamp duty is not the only cost incurred by buyers, the report noted five months of take-home income is “sizeable”, and particularly so for “owner-occupiers that move, who can pay for the new home by selling the old one, but incur stamp duty on top”.

As a result of the large costs, the report flagged that about one-quarter of Australians are deterred from downsizing, arguing that removal of this barrier could assist with the current housing crisis.

The report stated: “In a housing shortage, downsizing benefits everybody. The downsizers benefit from a better suited home. Everyone else benefits from the previously underused housing becoming available. In Australian cities, stamp duty is deterring close to a quarter of potential downsizers.”

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