Australian households are shelling out more than $90 per month just to cover costs associated with what is an excessive and unfair burden associated with stamp duty on the cost of housing purchases, a leading industry group says.

In its latest report, the Housing Industry Association said that during 2016, the average burden associated with stamp duty upon residential property purchases for a non-first-home buyer owner-occupier amounted to $17,811 – equivalent to 3.6 per cent of the cost of purchasing a home and almost four months’ worth of average income after tax.

Assuming loan terms of 30 years, the average the additional cost associated with stamp duty on the purchase of a home for a non-first-home buyer adds around $91 to the monthly mortgage repayment bill, the HIA says.

In terms of states, households in Victoria, New South Wales and the Northern Territory are the worst hit, with average additional monthly mortgage repayments of $117, $116 and $112 as a result of stamp duty respectively.

Households in the ACT, Western Australia and South Australia also bear a considerable burden, whilst Queensland and Tasmania residents bear a lesser burden – though the burden in Tasmania still equates to 3.5 per cent of the cost of a non-first-home buyer median range purchase.

In terms of the overall addition to the purchase price, meanwhile, Victorian non-first-home buyers forked out $22,900 more on their average household purchase price, whilst NSW buyers forked out $22,700 and NT buyers $22,000.

These figures relate entirely to non-first-home buyers; first-home buyers can receive stamp duty concessions in most states, though conditions vary across states.

The report comes amid an ongoing and concerted effort on the part of property and construction industry lobby groups to lobby for an easing of the burden associated with taxation levied upon housing purchases.

Housing Industry Association chief economist Harley Dale said stamp duty was imposing an unfair burden upon ordinary Australians trying to enter the housing market or upgrade their housing in order to suit their lifestyle requirements.

“I think it has a massive impact because it basically adds cost to people trying to get into a home for the first time or move home should they have for example brought into a modest town house type villa and then want to move on to a larger home as they are trying to have a family,” Dale said.

“The tax element of housing is incredibly high. Frankly, it is too high and it doesn’t make sense in terms of trying to let people get a leg up into the housing industry and put a roof over their heads.”

Dale said the stamp duty also had broader effects in terms of inhibiting labour mobility in the economy by discouraging people from moving house in order to take advantage of new business or employment opportunities across different locations. It also makes it more difficult for any older Australians who wish to downsize their housing to indeed do so.

Whilst he acknowledges that there is no ‘silver bullet’ solution to replace the revenue which would be lost to states if stamp duty was abolished or reduced, he said the federal government needed to show leadership and sit down with the states to talk about how this could happen.

In this regard, he says it is disappointing that the federal government has not moved to appoint a Minister for housing.

“It’s quite a stark omission from the Turnbull government cabinet that there is no Minister for housing,” Dale said. “There’s a Minister in charge of defence, a Minister in charge of education and a Minister in charge of health, but there is no Minister in charge of ensuring that Australians have an affordable roof over their head.”

“I think that’s quite a big miss in terms of allocation of the importance of various aspects of the Australian economy”.

  • The problem with taxes on housing is that it does not stop new ones keep coming out of the woodwork.
    Every Public servant makes the comment that "for another 1.30% of increase in the cost of building you will receive such great benefits"
    There are even compulsory certificates to be obtained at a cost when there is no need for them apart from additional tax collecting. Making the poor and rich pay the same amount of taxes is unfair and not logical.
    Housing is used to create employment for people by creating steps in administration. The key thing is that we are wasting the time of well educated people doing things that there is no need for them to be doing. Everywhere in Australia Local Governments think that should control the design of cottages and then call it town planning to justify it. The control and wasted money is not justified when you see the results on the ground.
    The billions of dollars wasted in interest payments every year by delays is a nightmare.

    The present situation on Housing used to be in the clothing industry in Australia until it was overturned in the 1970's.
    Many a family man used to live in his work blue overalls every day for years because they could not dress the children and themselves. Some children lived in rags as well. Black market pieces of cloth for trousers, dresses and suits used to be offered in the streets by sailors walking out of the ships with the few metres of cloth wrapped around their torso. Unfair taxes on clothes undermined peoples dignity. Australia rich in all fibres did not have to be become productive as the tax system protected them.
    In my neighbourhood the Government and all organisations were perceived as being created to keep them poor and suffering every hardship.

  • The Property Council (who represent big property owners & developers) is arguing for an increase in GST to offset Stamp Duty but in the end, stamp duty should be converted to an annual tax, which basically makes it a land tax, which is the only sensible substitute. Ken Henry's tax report from several years back showed this was the most progressive, fair substitute for stamp duty. The disincentive to move house is then removed for those getting new jobs far from their existing house, folk down/up-sizing etc, but the tax is kept on land – which is extremely necessary. If you remove a tax on land, the freed up income usually just gets added on top of the auctioned bidding price (we saw this with the first home owners grant which usually just added the grant amount to the purchase price therefore being better called in the eyes of some a first home developer grant). So a GST tax instead of stamp duty will generally just mean that the cost of stamp duty will now be freed up to pay the banks more for a property.