A greater number of property transactions could be on the horizon if other states and territories follow the lead of Victoria and Western Australia and make changes to how stamp duty is applied.
Calls for the tax seen to be the handbrake on the nation’s economic activity to be axed have already reached some decision makers.
WA last week unveiled sweeping changes to stamp duty in its state budget; the overhaul includes no longer charging eligible first home buyers stamp duty on new or established homes valued up to $600,000, up from the previous threshold of $500,000.
The Victorian Government also announced an extension of the temporary off-the-plan stamp duty concession until April 2027. This will reduce stamp duty payments by tens of thousands of dollars for eligible apartments and townhouses.
This follows last year's Senate Select Committee on productivity in Australia that set out to identify solutions on Australia’s housing crisis called for an end to taxation that is holding the nation back, which includes axing stamp duty.
Experts have urged decision makers to usher in sweeping tax changes including scrapping stamp duty in the hope the move would create more movement in the housing market.
Major stamp duty changes are being rolled out in WA. Picture: AAP Image/Richard Wainwright
Stamp duty is a tax levied by state and territory governments based on the transfer of land or property ownership. It is a significant upfront cost of buying a home or investment property that is paid upon settlement, with each state and territory having its own fee schedule.
Stamp duty was first introduced in Australia way back in 1865. The Property Council of Australia says the tax is unpredictable year to year and hurts the local economy.
It points out that a number of studies have confirmed that stamp duty discourages people from moving into more suitable housing, whether they have growing families, retirees looking to downsize or workers wanting to move closer to employment.
Given the relentless housing pressures facing all Australians, it’s unsurprising that many are seeking relief in the form of tax breaks.
Administered at a state level, stamp duty reform is seen as the silver bullet that could have a meaningful impact on restricted housing supply.
New data released in the latest Mortgage Choice Home Loan Report reveals that abolishing stamp duty is top of mind for Australians. The survey of 1,000 consumers highlights home loan trends, as well as the intentions of Australian borrowers and prospective buyers
Eliminating stamp duty for downsizers would benefit buyers across generations, incentivising homeowners to free up larger homes for young families to buy.
Speaking about the consumer research, Mortgage Choice chief executive Anthony Waldron says the report reveals that rising costs are top of mind for Australians.
Mortgage Choice chief Anthony Waldron says stamp duty is the number one issue Australians want addressed. Picture: Supplied
“Our survey results reveal stamp duty is the number one housing issue Australians want addressed, ranking high across all generations," he said.
"Our findings make it clear that older Australians, who hold the majority of the nation’s homes, want policymakers to tackle stamp duty and it’s not hard to understand why."
In Sydney, Brisbane and Perth, where the median home value now exceeds $1 million, a Baby Boomer looking to downsize their family home faces a stamp duty bill over $50,000 on their next purchase.
The research reveals just how Australians respond when they’re under pressure.
“It’s harder to buy a home, especially for younger generations, and the journey to property ownership looks different than it did even a year ago," Mr Waldron said. "But buyers are getting smarter about how they save, borrow and plan."
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