Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

The 800% tax increase hurting homebuyers

Notify me of new replies via email
Australian Broker | 15 Jun 2015, 08:32 AM Agree 0
In the last 20 years, stamp duty costs have increased by almost 800% in some states, forming another price barrier in the already heated property market
  • Patrick | 15 Jun 2015, 09:04 AM Agree 0
    In the US there is no upfront stamp duty on transfers, never has been. There is an annual property tax (combined state & local, it could replace both Council Rates and Land Tax) not just on land but on total property value. Quite affordable and broad based without taxing non-property owners and appropriately taxing multiple property owners.
  • Joe Siragusa | 15 Jun 2015, 09:14 AM Agree 0
    Are the figures quoted adjusted for inflation?
  • John | 15 Jun 2015, 09:20 AM Agree 0
    The Government is double dipping +++ on stamp duty.

    The fair way would be, if a property sold for say $400,000 and I purchased for $500,000, then I should only pay on the balance between the $400,000 and the $500,000?
    This will never happen, as the Government of the day will crow from the roof tops, how wonderful their economic policies are?????????? It would be fair on all. They may even have a sliding scale. Lets say you pay 5% between $400,000 to $750,000, then 6% and so on.
  • Wayne B-S | 15 Jun 2015, 09:31 AM Agree 0
    And let us not forget that ALL States signed an agreement with the Federal Gevernment when the GST was bought in that ALL State Taxes are to be reduced to Nil for their slice of the GST Pie. Funny how no one has sought to enforce those agreements. So now, many years on, we still have this double taxing especially with State Stamp Duty that has risen considerably with Inflation. It is a serious barrier to Housing activity and also for First Home Owners getting into the Market
  • Broker | 15 Jun 2015, 09:45 AM Agree 0
    My answer is too logical so it must be flawed. Remove all stamp duty on PPR's and double the stamp duty on investments. The amount of investors this removes from the market should be replaced by the buyers that were previously unable to purchase. At very least it will increase the % of Australians that own their home as opposed to increasing the average numbers of properties held by investors.
  • BJ | 15 Jun 2015, 09:55 AM Agree 0
    Once again, highly conflicted argument from the home loan sales commentator and the housing industry.
    Let's broaden the debate and include, sales commission (doubt that will not garner much support) and the sales industry will no doubt suggest that that COST has limited to zero impact. Also, include RE commissions. Now, do you suggest that non home owners (TAX PAYERS ) subsidise. Maybe you will also argue from that shallow grave that the offset be an increased GST. THIS FORUM NEEDS SOUND COMMENT WHICH IS WITHOUT CONFLICT. Nothing is more limited than a closed mind.
  • Papery | 15 Jun 2015, 11:04 AM Agree 0
    Stamp duty is a function of the sales price, so it is not stamp duty that is 'out of control' it is property prices & I do agree with Broker about doubling the duty for investors.
    I also agree that perhaps it is the RE agents sales commissions that are 'out of control'. Sales agents fees should be calculated as a fair price for the service provided....not a % of the sale.....which could mean a cheaper property gets charged a higher fee & more expensive pptys might lose less to agents fees. Fair price for a fair service.....ask yourself why may RE agents are all of a sudden driving around in cars way better than ours & the 'fair weather' sales agents are back!
  • Regional Broker | 15 Jun 2015, 12:45 PM Agree 0
    This tax was supposed to go when the GST was coming , never did happen, it is now too lucrative for the state governments to get rid of. It really needs to be gone.
  • KE finance broker | 15 Jun 2015, 06:03 PM Agree 0
    Sounds like the US system is a lot fairer. Here a single investor wanting to put a property into a family trust but didn't realise that was the setup for him until he spoke to a financial planner. Sure way to keep anybody out of property market altogether. Tax them TWICE and UPFRONT. Too lucrative to pass up ever!
  • Patrick | 16 Jun 2015, 08:55 AM Agree 0
    KE: Whoever the planner was they were not on the ball. If the trust has the same beneficiaries as original property ownership there is a process to make a "No Change to Beneficial Ownership Declaration" and pay nominal duty about $200.
  • Tim | 16 Jun 2015, 09:50 AM Agree 0
    Twenty five years ago my wife and I bought a unit for $75,000. It is now worth $850,000 based on recent sales in the area. Yes it has risen 1,133% in value.
    Real estate agents commission back then was 2.5% of purchase price. Still is so you do the math.
    Stamp duty rates as a percentage of the sale price have remained unchanged in NSW for more than 20 years also.
    A bit of balance in the arguments is required me thinks.
  • Papery | 16 Jun 2015, 12:29 PM Agree 0
    Hey Tim,
    Go a step further with the math.....what was your wage back then compared to now.
  • Tim | 16 Jun 2015, 01:21 PM Agree 0
    Hi Papery Done the math and based on 1,133% increase granted I would be a very well paid mortgage officer in a bank.
    But herein lies one of the very points of this whole first home buyer affordability discussion.
    Over the past 25 years we have bought and sold twice since the unit each time upgrading to a better property. At the same time our incomes have increased and consequently our borrowing capacity.
    It is wrong for the media, HIA and Property Council to be saying first home buyers can't get into an average 3 bedroom home due to their cost. First Home Buyers should be starting small (ie: a unit or even a small regional investment property), build up equity and either upsize to a smaller home or buy another investment property. Then as income and borrowing capacity grow make the next step to a larger home. Each step including the initial saving for a deposit may take five to ten years but it can be done.
    Have had this conversation around the dinner table with people of my age (mid 50's) who also took this path and with my sons and some of their friends who agree this is achievable.
    The conversation should be about education and not about affordability.
Post a reply