‘Axe the tax’: Real estate experts on why you can’t afford a house

PHOTO: Could removing this tax fix housing affordability? (Source: Getty)

Real estate agents and property economists have renewed calls to remove the “inefficient” and “silly” tax of stamp duty, which they say is an obstacle to housing affordability and discourages people from selling their homes.

Australians all across the country, bar the ACT, are paying “substantially” more stamp duty than they would have 20 years ago, which is holding back the ability to upsize or downsize and hamstrings the economy, according to a new report on stamp duty reform by the National Housing Finance and Investment Corporation (NHFIC).

The tax acts as a disincentive to moving homes, the report found: someone who bought an average-priced house in Sydney four times in the last 20 years would have paid more than 10 times the amount of stamp duty than a household that only bought one house.

The tax also comes at a significant cost. Victorians pay the most in stamp duty at 4.5 per cent, which adds a further $45,000 on top of the price of a median property. In 2002, this sum would have been $12,000.

Even residents in the ACT, who pay the least stamp duty across Australia, would have to fork up around $13,460 in stamp duty on a $500,000 home.

Ray White chief economist Nerida Conisbee noted that fixing housing affordability was “really complicated”.

“But inefficient taxes such as stamp duty certainly doesn’t help,” she told Yahoo Finance.

“It adds an additional cost to transacting so that means extra costs for buyers but also makes it less attractive for people to sell their homes.”