Stamp Duty Crusade
August 25, 2014
We believe it is time for the NSW government to look at reducing the amount of stamp duty we pay when buying a property.
As you can see below, the state government received $4.7 Billion in residential property stamp duty for the 2013/14 financial year.
Our concern is not so much that the government is receiving more tax (after all, the Teachers, Nurses and Police need to be paid somehow), we are more concerned with the growing housing affordability issue.
The average stamp duty paid by a property buyer is now $23,805. Nine years ago this amount was $14,485.
Higher property prices are pushing average home buyers into more expensive stamp duty brackets. Economists refer to this phenomenon as bracket creep. Governments tend to enjoy bracket creep because it delivers growing tax receipts.
The current stamp duty brackets (see below) have not been changed for a very long time (except for the "Premium Property" bracket than was introduced in 2004). When these brackets were put in place, the median house price in NSW was less than $300,000. The median house price in Sydney is now $783,000.
The ideal solution to this growing bracket creep problem would be for the NSW government to start indexing the Stamp Duty brackets against the median house price changes. If indexation were to occur, average home owners would not be forced into paying stamp duty rates that were originally intended for the top end of the market.
Feel free to pass this message on to your friends and family. The more people are made aware of this issue, the better chance we have of seeing change.
Tags: stamp duty