In Sydney, the stamp duty on a median-priced home has jumped from 45% of gross family disposable revenue per capita in 2000 to a staggering 120% in 2024. This shift has turned what was as soon as a comparatively manageable upfront expense into a major barrier, forcing patrons to avoid wasting for longer and pay extra – on prime of already steep deposits.
The evaluation additionally underscores the far-reaching penalties of stamp duty, beginning with the impression on particular person patrons and rippling by to the broader financial system and state funds. Powell stated that stamp duty discourages folks from transferring for job alternatives or to houses that higher swimsuit their wants, and even deters about 25% of potential downsizers. It additionally limits the flexibility of employees to relocate to the place expertise are most wanted, decreasing the dynamism of labour markets and cities, she argued.
According to Powell, the financial value is stark. “For each greenback it raises, round 70 cents of potential financial exercise is misplaced,” she stated. “By distinction, elevating the identical quantity by a broad-based land tax prices the financial system lower than 10 cents.” She added that the volatility of stamp duty revenues additionally exposes state budgets to damaging swings, whereas the tax falls disproportionately on youthful Australians and frequent movers.
Domain singles out the ACT as a mannequin for reform, having begun a 20-year transition from stamp duty to a broad-based land tax in 2012. This strategy, Powell identified, “prevented fiscal shocks, gave households time to regulate, and ensured all properties contributed to income.” However, efforts in different states, akin to NSW’s short-lived opt-in mannequin for first-home patrons, have faltered with out bipartisan assist.
