Yahoo Finance ‘Ridiculous’ $100k stamp duty blasted by property exec
Property executive John McGrath has come out swinging against “absurd” increases to stamp duty charges in a new report.
The managing director of McGrath Estate Agents has described current rates of stamp duty as “ridiculous” in the McGrath Report 2020.
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McGrath branded transition costs as a major element driving low listing volumes.
“Upgraders in big cities are paying close to $100,000 in fees and absurdly high stamp duty.
“If we went back just 20 years for direct comparison, we are now paying an additional $40,000 (inflation adjusted) or 400 per cent in real terms."
He said this was “ridiculous” and penalises nearly every Australian attempting to move homes.
While the ACT government has committed to end stamp duty by 2032, McGrath said other state governments’ reluctance to turn off the revenue tap was also an issue.
“They seem addicted to the revenue it brings them. As a result, it’s possible that these lower levels of activity will remain for some time.”
According to the NSW Productivity Commission, stamp duty costs the Australian economy $2.35 for ever dollar in tax revenue.
NSW Treasury has also described the tax as “highly inefficient” and one that presents a barrier to homeownership.
“The states have, historically, relied on taxes that have relatively high economic and social costs and dampen productivity. Some taxes have larger impacts than others,” the treasury said in a discussion paper released in October.
“Stamp duty on residential properties are particularly costly as they add to the cost of buying a house and therefore discourage people from downsizing, or moving closer to preferred jobs, schools and family.”
And according to a report from CoreLogic into perceptions of housing affordability, Australians view stamp duty as a major impediment to buying a home.
Removing stamp duty was considered the best way to improve housing affordability by 79 per cent of respondents.
“As a priority, we need to transition from a stamp duty-based property tax scheme to a broad-based land tax. We all accept governments need to raise taxes through property,” CoreLogic International chief Lisa Claes said.
“But stamp duty is inefficient. It very much falls at the point of purchase. New customers carry the burden.”
The WA government is now offering stamp duty rebates of up to $50,000 to buyers purchasing off-the-plan homes.
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