STAMP DUTY: There are calls for a reduction in stamp duty to ease housing affordability.
STAMP DUTY: There are calls for a reduction in stamp duty to ease housing affordability. Andy Dean Photography

Stamp duty the root of price problems

Stamp duty the root of price problems

NEW research from the Property Council shows Australians are paying tens of thousands of dollars when they move house, creating a major impediment to the efficient use of Australia's housing supply.

"The biggest cost of moving is stamp duty which you have to pay if you are up-sizing or downsizing. Then when you add on removalists, conveyancing fees, bank fees and real estate commissions, the figure becomes substantial,” said the chief executive of the Property Council of Australia, Ken Morrison.

"The danger of high transaction costs is that it discourages the efficient use of housing stock. It's another reason we have an issue in our major cities with housing affordability.”

Mr Morrison said with the transaction

costs of selling being in the tens of

thousands of dollars, it can be assumed there are tens of thousands of family homes not in the market simply because of the transaction costs.

"In NSW, for example, stamp duty has doubled in just six years from $20,000 for the average property to $40,000,” Mr Morrison said.

"We are seeing similar lifts elsewhere. If the state governments are serious about housing affordability they can start with stamp duty as well as reform planning systems.”

Mr Morrison said there were tens of thousands of older couples around the country who saw no financial reason to downsize.

"In so many of these properties, instead of a family occupying a three or four-bedroom residence, it is just one or two people. Our proposal to help pensioners over the age of 75 to downsize could potentially bring up to 50,000 family residences into the market, which would help take pressure off housing prices.”

Startling research commissioned by the Property Council and carried out by Deloitte Access Economics shows that Australia would witness an additional 340,000 property transactions every year if there was no stamp duty added to transactions.

But Mr Morrison realises that scenario is unrealistic.

"We know state budgets cannot afford such a step but it does highlight how stamp duties and other fees inhibit the efficient use of housing.”

Australians currently hold their property for an average of 13 years, but the research shows that the removal of the stamp duty arrangements would see that figure fall to eight years.

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