One of the big bones of contention with Australian homebuyers and investors has always been the cost of purchasing a property. But it’s not necessarily the price they pay, rather it’s the enormous stamp duty bill that comes with buying an established home or block of land.
Recent figures released by BankWest reveal that the amount of stamp duty payable for a typical house is now $14,761, which represents an increase of 36% over the past five years.
And while Sydney holds the title of most expensive city when it comes to housing, Melbournians are being slugged with the highest stamp duty levy in the nation, with a median property attracting a $30,000 stamp duty bill.
Melbourne property buyers have been hit with a whopping 47% increase in median stamp duty levies over the past two years alone, closely followed by Darwin at 40%. Brisbane buyers are the best off, paying less than a quarter of the Melbourne stamp duty bill for a median priced property at $7245.
With regard to these exorbitant rises in stamp duty, BankWest retail chief executive Vittoria Short says, “There’s little doubt that stamp duty is among the most unpopular duties a homeowner encounters, and our research shows they are a significant financial add-on to the cost of a property.”
So significant is this extra purchasing cost that, in many cases, stamp duty represents the equivalent of three months worth of household income for the average home buyer, or 3.3% of the purchase price on a median house.
Shortt says the expense of stamp duty can often be a contributing factor to people choosing to renovate or extend their existing home, rather than upgrading to something bigger and better.
“All states offer stamp duty concessions for first homebuyers and there have been concessions for new homebuyers, which also helps. But people already in the property market who are looking to upgrade in their area, generally face higher bills,” she says.
With state governments raking in big bucks from stamp duty charges, it’s unlikely home buyers will receive a reprieve from this cost any time soon. According to the BankWest report, the total revenue raised by states and territories over the last five years from stamp duty levies on residential and commercial property sales is up to $57 billion.
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