With the recent news of skyrocketing property prices there comes another associated rising cost in the form of stamp, or transfer duty payable on the property. Transfer duty is payable on the price of the property purchased, which means that an increase in prices brings a corresponding increase in transfer duty.
The article below takes a look at how the amount of transfer duty payable on a property varies from state to state.
The Real Estate Institute of NSW (REINSW) has joined a growing chorus of voices calling for changes to stamp duty on residential property.
REINSW president Malcolm Gunning said NSW home buyers were being hit with excessive amounts of stamp duty, which is known as transfer duty in some states, due to increasing house prices.
“Stamp duty was never designed to slug the average property owner at such high levels,” he said.
Gunning’s comments echo recent calls from others in the industry including the heads of other state branches of the Real Estate Institute, Property Council of Australia of South Australia executive director Daniel Gannon, and CoreLogic RP Data senior research analyst Cameron Kusher.
The tax has been criticised for holding back new residential development and discouraging housing turn over, such as downsizing the family home.
In the UK, cuts to the rate of stamp duty charged on properties introduced late last year have reportedly led to a jump in the number of people looking to buy a home.
Stamp duty is levied by the states, so its level varies depending on the location of the property. First home buyers in some states receive concessions which mean they do not have to pay duty on the purchase of properties up to a certain value. There are also concessions in some states for buying new homes or vacant land for building a home.
Here are some examples of how stamp duty varies for purchases of established homes in each state. The greatest variation is for lower valued properties where concessions for some types of buyer come into play.
Article originally published on propertyobserver.com.au.