Australia's growing stamp duty tax is taking its toll on Aussie home buyers – leaving them in more debt and eating away at potential retirement funds.
A report by the Housing Industry Association (HIA) has revealed that the average Australian home buyer is forking out upwards of $15,000 in stamp duty alone – and that doesn't factor in home loan costs, removalists, conveyancing or bank fees.
"In all but two of the eight jurisdictions, stamp duty will set buyers back at least $15,000 on the median-priced home. This form of taxation makes household indebtedness worse by increasing required borrowings," Shane Garrett, HIA Senior Economist, said.
How much is stamp duty costing buyers?
One of the biggest one-off, upfront costs of buying a property is stamp duty. You are obliged to pay it when buying a home, and new research suggests the costs are remarkably high for some Australians taking out home loans.
Stamp duty costs in Victoria are the greatest of the entire nation — a home buyer in this eastern state will fork out an average $24,100 to meet this tax.
In Western Australia and New South Wales, the average stamp duty bill is $20,000, which is still behind the likes of Victoria but nothing to sneeze at.
“Stamp duty results in total mortgage repayments increasing by $46,400 in Victoria and by $37,100 in NSW. In WA, additional mortgage repayments will total $33,800,” Garrett reported.
Stamp duty burns buyers' wallets
For Australian home buyers, who in some cases are already struggling to save a 20 percent home loan deposit, the added stress of high stamp duty taxes is impacting their long-term financial circumstances.
"The burden of stamp duty is significant in all states and territories. With the exception of Queensland, the tax adds at least three percent to the cost of the dwelling. In Victoria, the typical stamp duty bill comes to some five percent of the dwelling price," Garrett said.
“A better alternative for stamp duty would be to have it placed in buyers' superannuation funds,” he suggested.
How much stamp duty will I have to pay?
Stamp duty varies between states, so there's no hard and fast rule for the exact amount. That said, it's simple enough to calculate stamp duty once you know which state you're buying in and a specific property's value.
For instance, say you're purchasing a home worth $450,000. You'd be required to pay the following in stamp duty:
- ACT: $5,237.50
- New South Wales: $15,740.00
- Northern Territory: $20,057.17
- Queensland: $7,000.00
- South Australia: $18,830.00
- Tasmania: $16,122.50
- Victoria: $18,970.00
- Western Australia: $15,390.00
By Kate Wick