{"id":5702,"date":"2024-02-12T01:33:50","date_gmt":"2024-02-12T01:33:50","guid":{"rendered":"https:\/\/economicherald.net\/?p=5702"},"modified":"2024-02-12T01:33:50","modified_gmt":"2024-02-12T01:33:50","slug":"stamp-duty-now-costs-your-average-sydney-homebuyer-half-a-years-income","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=5702","title":{"rendered":"Stamp duty now costs your average Sydney homebuyer half a year\u2019s income"},"content":{"rendered":"

Silent but deadly, stamp duty costs in this country are about as funny as a fart in an elevator.<\/p>\n

Now Aussie home buyers have to reckon with a stamp duty which is some six times more than it was just a generation ago, according to cheerful new research which wants to quantify the impact of stamp duty on Australia\u2019s housing market.<\/p>\n

The findings of the joint project from E61 Institute and led by Angus Moore, senior economist at PropTrack, is no love letter to the onerous impost which they conclude is skewering the Aussie dream for many.<\/p>\n

They say the downpayment direct to the government coffers is essentially \u201ca significant upfront cost and a barrier to entering the housing market\u2026 impact(ing) how people buy and sell and where they choose to live.\u201d<\/p>\n

The study comes as new Reserve Bank of Australia (RBA) research highlights just what a collective whack Australian borrowers have copped since the first of a dozen hikes to the official cash rate.<\/p>\n\n

The RBA says the collective quarterly national interest bill to be squared by mortgage holders has jumped by more than 130% over just the past two years.<\/p>\n

In the final three months of 2021 we coughed up just $7.4bn.<\/p>\n

A mere seven quarters later \u2013 in the last months of 2023 \u2013 we paid $17.1bn in credit payments.<\/p>\n

Today, the bank says, interest repayments alone are at a record $190 million a day. In the final quarter of 2021, interest was at $81 million a day.<\/p>\n

\u00a0<\/p>\n

Stamp of failure<\/h2>\n

Meanwhile, Mr Moore hopes the government will embrace the data which he reckons might help someone better identify alternative solutions.<\/p>\n

\u201cStamp duty is very costly. Home buyers in Sydney and Melbourne must spend half a year\u2019s worth of full-time income, a burden that has increased enormously compared to a generation ago.\u201d<\/p>\n

Moore reckons it\u2019s an inefficient tax because it discourages people from moving to homes that suit them.<\/p>\n

\u201cWhile the rise has largely been incidental, rather than an intentional increase in tax rates, stamp duty reform is critically needed to allow the property market to operate more efficiently.\u201d<\/p>\n

\u00a0<\/p>\n

Key findings:<\/strong>
\n\u2022 Stamp duty costs around six months take-home income in Sydney and Melbourne, which has doubled since the 2000s and grown as much as 6-fold since the last generation.<\/em>
\n\u2022 In Sydney, stamp duty on a median-priced home is equivalent to 6 months of full-time post-tax income. That is 5.4 times higher than it was in the early-to-mid 1980s.<\/em>
\n\u2022 In Melbourne, buyers need the equivalent of 6 months of full-time post-tax income \u2013 a whopping 6-fold increase from four decades ago \u2013 the largest increase of any state.<\/em>
\n\u2022 Housing costs are reportedly holding people back from moving homes, downsizing, changing jobs and having children.<\/em>
\n\u2022 The most popular housing policy for state governments is to abolish stamp duty.<\/em><\/p>\n

Research Manager at the e61 Institute, Dr Nick Garvin, said: \u201cOur research also highlights the indirect impacts of stamp duty on other parts of people\u2019s lives including whether or not they change jobs, and when they decide to have children.<\/p>\n

According to the research, to come up with the stamp duty for your new capital city home these days, you\u2019ll be needing months of take-home income standing by (Figure 1, just below).<\/p>\n

\u00a0<\/p>\n

\u201c<\/p>\n

\u00a0<\/p>\n

\u00a0Stamping out opportunity<\/h2>\n

\u201cThis cost has covertly doubled since the 2000s,\u201d according to Moore.<\/p>\n

\u201cThere is no specific policy change to blame, just housing prices out-pacing income as well as stamp duty bracket creep. State government budgets have benefited from the growing tax revenue.<\/p>\n

But for taxpayers, the toll is more than just time and money.<\/p>\n\n

According to survey data taken from the study, housing costs have caused one quarter of Australians under 40 to delay changing jobs.<\/p>\n

And it\u2019s stamp duty which has caused more than one in five 30-40 year olds to delay having kids, and are preventing people of all ages from moving homes.<\/p>\n

Dr Garvin reckons overhauling the current stamp duty system has the potential to alleviate these pressures on individuals and the economy more broadly.<\/p>\n

\u201cHousing affordability and availability is without a doubt a challenge of our time. Governments and policymakers must consider the unpopularity of stamp duty, and the indirect impacts stamp duty has on various other parts of the economy and people\u2019s lives,\u201d Dr Garvin said.<\/p>\n

\u00a0<\/p>\n

Positive on negative<\/h2>\n

Meanwhile, the Federal Treasurer Jim Chalmers has told weekend telly that the 7-8% of Aussies who own an investment property needn\u2019t worry about any tweaks to negative gearing and capital gains.<\/p>\n

Both Prime Minister Anthony Albanese and Opposition Leader Peter Dutton face pressure to revisit tax breaks on investment properties.<\/p>\n

The Greens are proposing limiting negative gearing rules to a single investment property, but Dr Chalmers has nixed all of that talk.<\/p>\n

\u201cThat\u2019s not something that we\u2019re proposing, not something that we are considering, not something that we are working up,\u201d he told Sky News on Sunday.<\/p>\n

Former NSW premier Dominic Perrottet has called for negative gearing reforms to be considered as part of this wider debate about how tax changes could address housing affordability.<\/p>\n

<\/span><\/p>\n

The post Stamp duty now costs your average Sydney homebuyer half a year\u2019s income<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

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