Recent research by the e61 Institute and PropTrack has highlighted the substantial impact of stamp duty on Australians, hindering mobility, career changes, and even family planning. Adjusted for inflation, the burden of property transfer duties levied by state and territory governments now equates to five months of income for the average full-time worker, according to e61's research manager, Nick Garvin.
Despite calls for reform due to its stifling effect on the economy, many state governments heavily rely on stamp duty revenue, especially during housing market booms.
In Melbourne, where stamp duty costs have surged the most, buyers needed the equivalent of six months of average full-time post-tax income, or $42,500, to cover stamp duty on a median-priced home. That is a six-fold increase from the mid-1980s.
In Sydney, stamp duty for a median-price home has recorded a five-fold increase to $44,500 or half a year’s income.
An e61 survey shows that stamp duty has led a significant portion of Australians to delay major life decisions, such as changing jobs and having children. This delay not only affects individuals but also hampers productivity and economic growth.
Stamp duty reforms
In NSW, despite previous plans for reform being abandoned, stamp duty remains a contentious issue. Victoria and SA have made strides in scrapping stamp duty on commercial property but have yet to extend these reforms to housing. Meanwhile, the ACT's attempts at reform have faltered.
While conversations around stamp duty reform persist, significant barriers remain, primarily due to its entrenched political sensitivity. However, consultancy Corrina’s Saul Eslake said the next few years were arguably the best time given every federal and state jurisdiction except for Tasmania is governed by Labor.
Eslake noted: “You’ve got seven out of the eight governments from the same political persuasion. So there probably isn’t a better time to get the federal and state governments to co-operate on something than now.”