The New South Wales government is eyeing another year of record income from stamp duty, with an estimated $7bn to be collected from residential stamp duty by 30 June, compared with $6.5bn in 2016. When commercial stamp duty is factored in, the Berejiklian government is in line to collect up to $9bn, an increase from $8.4bn last year.
While this means more revenue for the state, it is making buying a home virtually impossible for first-home buyers. While the tax itself has not been raised for a long time, it’s based on property value. Hence, as prices rise, so too does the amount buyers have to pay in stamp duty.
Last year’s 15% increase in Sydney’s median property price means buyers now shell out about $33,000 in stamp duty on top of the $850,000 median price for a home, according to CoreLogic. The current stamp duty equals 38% of the $86,000 average NSW household income.
In the mid-90s, buyers had to pay less than 10% of the average NSW household income to meet stamp duty costs on an average-priced property.
NSW’s hefty stamp duty has its fair share of critics. “The river of gold is overflowing and flooding,” said Jane Fitzgerald, executive director of NSW Property Council. “We think any housing affordability plan has to include serious reform of the planning system and reform to stamp duty.”
“Premier Berejiklian refuses to even face the fact that housing affordability in Sydney is well and truly at crisis point and needs far more than increased supply to fix it,” said opposition treasury spokesman Ryan Park.
The NSW government is working on proposals to make stamp duty more affordable but has yet to release any specific details.
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