Mercury (Hobart) - Property

OUT OF CONTROL TAX

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NATHAN MAWBY

AUSTRALIAN stamp duty costs are “completely out of control” as ‘bracket creep’ is slashing the number of homes for sale and fuelling affordabil­ity issues, property experts claim.

A new report by the Real Estate

Institute of Australia and SQM Research has found the percentage of Australian homes available to purchase has fallen from 4.5 per cent in 2008 to just 2.5 per cent today, with figures considerab­ly lower in the major capitals.

Report author Louis Christophe­r acknowledg­ed the figures would also have been impacted by a surge in panic listings in 2008 as the global financial crisis hit, while the current low listing numbers were in part due to protracted lockdowns in Melbourne and Sydney.

“We aren’t saying this (stamp duty) is the whole reason, but this does seem to be a leading contributo­r,” Mr Christophe­r said.

“There has definitely been a stamp duty bracket creep. We think that has increased the overall transfer cost, and we believe that would be a fairly significan­t disincenti­ve to move house.”

The research shows across the country that stamp duty now equates to 4.2 per cent of a homes price, which was up from 3.2 per cent in 2011. Tasmania’s capital had 4.8 per cent of its homes available for sale in November 2012, and just 1.1 per cent in August this year.

The high water mark for Hobart houses was about 4.2 per cent in early 2013, and 8 per cent of its units available for sale in early 2012.

While the median house attracted $11,270 in stamp duty in 2012 (3.3 per cent of the home’s value), it is now at $22,498 (3.7 per cent of the home’s value). For units the numbers have risen from $8302 to $22,498.

Average annual earnings rose from $62,239 to $79,076 in the time.

But the island state does have one ongoing issue, with developmen­t constraine­d by the difficulty of accessing supplies locally and new builds more expensive as a result, according to Mr Christophe­r.

REIA president Adrian Kelly said there were a range of factors driving prices up and listing numbers down, including those nervous about being caught out by Covid-19 lockdowns.

He called for politician­s to stop treating stamp duty and housing affordabil­ity as an election term issue and to outline a 20year plan that would transcend changes in government.

“Tax on housing is one part of it, but freeing up land and planning is another,” Mr Kelly said.

“The bracket creep for stamp duty is getting completely out of control.”

The report also shows that the number of properties in Australia has risen from 8.6 million in 2008 to 9.6 million in latest estimates, making the falling number of homes for sale even more remarkable.

Alternativ­es to stamp duty include a broadbased land tax, which is being sought by the REIA.

In the past, the federal government has looked at including housing under the GST, but Mr Kelly said that idea was unlikely to win support today.

“But something has got to give,” he said.

“All of the premiers have got to get their heads together and come up with something better than we have got now — particular­ly for the first-home buyers.”

 ?? ?? Cropped image of businessma­n calculatin­g tax by model house and stacks of coins on table
Cropped image of businessma­n calculatin­g tax by model house and stacks of coins on table
 ?? ?? Stamp duty in Hobart has grown from $11,270 to $22,498 in just one decade.
Picture: Supplied
Stamp duty in Hobart has grown from $11,270 to $22,498 in just one decade. Picture: Supplied

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