Home buyers want stamp duty stamped out
PENNY KENDELL was forced to pay the State Government $20,000 in stamp duty after she purchased a home in Richmond Hill with her daughter - and she is not happy.
“It's something I realised I had to wear if I wanted the property,” she said. “But personally I think it should be scrapped. It's not really for anything - just a money grab by the Government.”
Still, Ms Kendell is one of the lucky ones - at least she has the money to pay the duty.
A report by Bankwest found that hefty stamp duty costs were preventing people from buying houses across the nation, and virtually keeping a lid on prices.
The report found that buyers in NSW were slugged the highest stamp duty rate, followed closely by Victoria, South Australia and West Australia.
It calculated that state and territory governments collected $53 billion in stamp duty over five years, while annual stamp duty revenues increased 77 per cent in that period.
“This helps to explain why Australians are finding it difficult to enter the housing market, and reveals that more than half of all state governments are benefiting from threshold limits that have not been changed to reflect higher property values,” said Ian Corfield, bankwest chief executive of retail banking.
“This is the downside of the house price boom that has pushed up stamp duty bills and burdened home buyers across the country with an additional tax expense.”
The rate of stamp duty charged on property purchases increases as the property value rises.
For example, a home sold for between $80,000 and $300,000 attracts a rate of 3.5 per cent, rising to 5.5 per cent for a home sold at between $300,001 and $1 million.
Mr Corfield estimates that NSW households must now set aside more than 20 per cent of their annual incomes to pay for stamp duty on a new house.
Lismore property agent Ben Condi, of Wal Murray Real Estate, said the majority of people looking for homes in the area were first-home buyers exempt from the duty, but said investors were wary of the additional cost of the duty.
He said after spending the last couple of years on the sidelines, property investors were slowing starting to reappear as rental vacancy rates remained tight, and interest rates were tipped to fall another one percentage point today.
“Stamp duty is an extra expense that investors have to weigh up when they work out their rate of return,” Mr Condi said.