Homebuyers in Australia’s biggest capital are having to spend almost $75,000, leading to a major hurdle in improving housing affordability, according to one of the country’s largest real estate associations.
New research from The Property Council has found that stamp duty and other moving costs can set Sydneysiders back $74,815 while home buyers in Melbourne are $10,000 better off.
“The biggest cost of moving is stamp duty which you have to pay if you are upsizing or downsizing,” said The Property Council's chief executive Ken Morrison. “When you add removalists, conveyancing fees, bank fees and real estate commissions, the figure becomes substantial.”
These high costs prevent efficient use of housing stock, leading to another factor in the housing affordability crisis, he said.
According to Deloitte Access Economics, an additional 340,000 property transactions would take place each year if stamp duty was abolished.
At present, Australians hold their homes for an average of 13 years. This would drop to eight years with the removal of stamp duty, Morrison said.
Further impediments are caused by NSW stamp duty doubling from $20,000 for the average property to $40,000 in just six years.
“We are seeing similar lifts elsewhere. If the state governments are serious about housing affordability they can start with stamp duty and planning system reform.”
The Real Estate Institute of New South Wales (REINSW) has also come out with a statement about stamp duty, praising reports that the NSW government is considering changes for first home buyers.
“It is great to see Premier Berejiklian is taking her commitment to the people of NSW seriously,” REINSW President John Cunningham said.
“We must see true support of first homebuyers in the June 2017 Budget. While we have been calling for an abolition of stamp duty for first homebuyers, the first step is to address the stamp duty brackets which have not been adjusted for 30 years.”
With research showing that 90% of first homebuyers purchase existing properties, the REINSW called for the state government to bring in a 50% reduction of stamp duty for residential property worth less than $1m.
“Providing purchasers with the ability to pay stamp duty over time instead of upfront will also assist in getting more people in NSW realising the great Australian dream of owning their own home.”
The regional homebuyers scheme, which was wrapped up in March 2015, should also be put back on the agenda, he said.
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