Geelong homebuyers hit hard by 20-year stamp duty bill blowout

With a $3.2m to $3.5m price tag, the stamp duty on 28 Saratoga Ave, Barwon Heads would be $188,000.

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A huge increase in the stamp duty burden has added more than $30,000 to the cost of typical Geelong home over the past 20 years.

New PropTrack analysis reveals buyers need to find an extra $22,000 to $58,000 to purchase a house in suburbs across the region.

Those targeting the premium coastal markets of Barwon Heads and Torquay, where median values have soared above $1m in recent decades, have been hardest hit.

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The typical stamp duty bill in Barwon Heads has jumped from $18,460 back in 2006 to $77,000 this year.

In Newtown, where the median sale price is $1,127,500, buyers can expect to stump up $62,012 for stamp duty, compared to $17,260 two decades ago.

Manifold Heights recorded a fourfold increase over the same period, adding more than $41,000 to the cost of purchasing.

The lower end of the market has also been hit, with Norlane’s typical stamp duty climbing from $3800 to more than $26,000.

This four-bedroom home listed for $2.7m to $2.97m at 6 Upper Skene St, Newtown would attract about $155,000 in stamp duty.

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You could expect to pay almost $60,000 in stamp duty if buying 279 Autumn St, Manifold Heights, which is selling for $1.09m to $1.19m.

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Eligible Victorian first-home buyers are exempt from the tax on properties up to $600,000, with tapered concessions available up to a $750,000 purchase price.

But Geelong real estate advocate Tony Slack said realistically there weren’t many places left where you could find a home for under $600,000.

He called for the removal of the purchase price cap to make things easier for qualified buyers.

“It’s really hard for first-home buyers to save that stamp duty if they are renting,” Mr Slack said.

“It’s a huge sum and money and more often than not first-home buyers are delaying purchasing.”

First-home buyers could take advantage of stamp duty exemptions to purchase this three-bedroom townhouse at 1 Supine Walk, Mount Duneed. It’s listed for $600,000 to $650,000.

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He said stamp duty costs also weighed heavily on the minds of those already in the market, who often opted to spend the $50,000 on a renovation rather than upsizing or downsizing.

“If you are on the pension are you going to go and downsize your home knowing you are going to be up for tens of thousands of dollars in stamp duty? Of course not, you’re going to stay where you are in most cases,” he said.

“People talk about the maintenance side of things but you get a lot of lawn moving and hedge trimming for the same amount of money as stamp duty.

“It’s a real disincentive to unlock family homes to the market.”

REA Group senior economist Anne Flaherty says stamp duty can be a disincentive for buyers and sellers.

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REA group senior economist Anne Flaherty said falling house prices would ease the stamp duty burden but many homeowners would still be reluctant to sell as they weren’t sitting on gains.

“The difficulty is because stamp duty is still so high in a market where prices are falling, it’s going to take a lot longer to get capital growth,” Ms Flaherty said.

“And so for a lot of homeowners when calculating their real overall capital growth it can take several years potentially to actually have enough capital growth to offset the upfront cost of stamp duty.”

GEELONG STAMP DUTY CHANGES OVER 20 YEARS

Source: PropTrack