Rising cost of stamp duty slammed by economists
In the aftermath of an increase in stamp duty taxes last month, housing industry bodies are lobbying to abolish stamp duty altogether due to new findings.
Research commissioned by the Property Council of Australia found that Australia’s GDP would increase by $3.3 billion through investments if stamp duty was replaced with the same amount of GST.
“Stamp duty is universally recognised as one of the most inefficient and harmful taxes,” said Property Council Chief Executive Ken Morrison in a report.
“It really hurts not just homebuyers but the whole economy,” he said.
The federal government enforced a 7.9% rise in stamp duty last month, which, according to the Housing Industry Association is a huge jump.
“Apart from the immediate effect of being over $19,000 worse off, stamp duty results in mortgage interest payments increasing by about $15,900,” said HIA Senior Economist, Shane Garrett.
“The end result is that the typical stamp duty bill of $19,045 can snowball up to about $50,000 once LMI and mortgage interest are factored in. This is an unacceptable burden to place on ordinary homebuyers,” Garrett said.
A report by Deloitte Access Economics found that the economic impact of stamp duty works out to be an extra $20 per week for each Australian household to bear.
The Property Council of Australia and the Housing Industry Association are urging the Australian government to bring stamp duty reform to the table when they meet this week.
“Getting rid of taxes which harm the economy benefits everybody and should be a key objective of tax reform,” said Ken Morrison of Property Council Australia.
“That’s why abolishing stamp duty has to be on the agenda when federal, state and territory leaders meet this week.”
Are you concerned about stamp duty taxes affecting you? Save money where you can by getting the best home loan rate possible by comparing rates from our hub. Or, if you’re looking at refinancing we break down the market for you to compare here.