‘Enormous penalty’: The tax slugging Hobart homebuyers

Duty is a key factor in deciding whether to buy or sell a home, says REA Group economist Anne Flaherty. Picture: Supplied

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Hobart home values have skyrocketed over the past 25 years, and so has the cost of buying a house.

New PropTrack research shows how much stamp duty buyers paid on a median-priced home in 37 suburbs in 2000 compared to today.

The figures are striking.

The largest change was in Risdon Vale, where a median-priced house, $46,500, used to cost an owner-occupier $963 in duty.

Today, the suburb’s median has increased by 1050 per cent to $535,000. And the duty bill has jumped by about 1949 per cent to $19,735.

Risdon Vale buyers are being slugged 20 times more duty now than they were in 2000.

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No.95 Athena Dr, Risdon Vale is listed at $695,000-plus. Picture: realestate.com.au

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No.1 Saltbush Rd, Risdon Vale is priced at “Offers over $630,000”. Picture: realestate.com.au

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Across Hobart, the increases ranged from 10.1 to 20.5 times more duty, with only seven suburbs having increases that were not double-digits.

Old Beach had the smallest shift, from $3175 to $27,598, or 8.7 times higher.

Buyers in Sandy Bay pay the most duty, $53,685 on a typical $1.3m home. The least duty is paid in Bridgewater, a still substantial $18,460.

Analysis from Money.com.au and Primara Research shows the average duty paid per transaction in Tasmania is $31,852, and that across all states, governments collected over $34bn in duty during the last financial year.

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Real Estate Institute of Tasmania president Russell Yaxley said duty is tracking upward more and more as prices increase.

“It’s clear that duty is not working as intended,” he said.

“We have bracket creep quietly taking a bigger share of every Tasmanian’s biggest purchase.

“A solution could be having thresholds and indexing them to CPI, a fairer and more equitable way to assist buyers moving forward.

“But that would be a significant change for the government.”

REIT president Russell Yaxley.

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REA Group economist Anne Flaherty said the huge increases shown in the data highlighted how much of a disincentive stamp duty could be to buying and selling a home.

“There’s been an incredibly dramatic increase,” she said.

Ms Flaherty said duty had become a key factor in deciding whether to buy or sell a home.

“It slows people’s decisions. They’re going to be less mobile when you have to pay such an enormous penalty for moving home,” she said.

“We want people not to have a disincentive to move when it suits their lifestyle needs, and in a market where home price growth isn’t particularly strong, it can take longer to make a profit on that home and experience enough capital growth to make up for the stamp duty outlay.”

REA Group economist Anne Flaherty.

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With the new financial year, the state government’s 100 per cent duty exemption for first home buyers purchasing up to $750,000 has ended.

Mr Yaxley said first home buyers are finding it more difficult to service their financial requirements with the reduction of the grant.

“However, there is still assistance and other options available, both state and federal, when choosing an existing or a new home,” he said.

– with Elizabeth Tilley