Any Aussie who currently owns a property can remember the feeling of walking through the front door of their brand new home for the first time. But a moment many will want to try to forget is the bundle they had to cough up in stamp duty.
In the last financial year, stamp duty and land taxes paid by home buyers and investors in New South Wales totalled an eye-watering $13.8 billion.
And according to recent data, obtained by the ABC, Aussies in Sydney are paying the majority of it at almost $7 billion.
Those buying in regional areas paid $1.6 billion, while developers purchasing large blocks of land paid around $2.6 billion, with the overall majority of the duty being paid by young buyers entering the market.
So which Sydney area pays the most?
- Sydney, $345 million
- St Leonards, $134 million
- Kellyville, $199 million
- Mosman, 190 million
- North Ryde, $106 million
- Newington, $99.7 million
- Riverstone, $94.2 million
- Blacktown, $89.7 million
- Waterloo, $88.3 million
- Parramatta, $86.3 million
Calls for change
A recent paper by the Property Council of Australia has argued that in order to improve housing affordability, stamp duty will have to be largely reduced.
NSW Property Council Deputy Director, Cheryl Thomas believes that current stamp duty thresholds need to be reviewed, as they have not been revised in NSW for over 30 years.
“The thresholds must be revised to reflect the current market and reduce price pressure on homebuyers,” she said.
A substantial loss of revenue
Due to the cooling property market, stamp duty is expected to fall by almost 11% within the year, from $6.3 billion to $5.6 billion, which could see a booming source of government revenue take a massive hit.
And surprisingly, rather than skyrocketing property prices, it’s the unpredictability in sellers putting a dent in the cost of stamp duty.
"Volatility in residential transaction volumes and the timing of turning points in market sentiment are the key challenges in forecasting transfer duty," the budget papers revealed.
"Volumes are significantly more volatile than prices in part because owners tend to resist selling when prices fall in nominal terms."
And while there were no other stamp duty concessions or exemptions introduced in this year’s Budget, the government has anticipated that by September property prices will have declined by a total of 7.5% from their peak in 2017, due to tighter credit standards, smaller credit availability and little supply in housing, before rising again in 2019-2020.
Find out how much stamp duty you could expect to pay by taking our stamp duty calculator for a spin, before heading over to our home loan comparison tool to check our some of the latest home loan offers.