$41bn stamp duty bonanza must tally in tax debate

Homebuyers in Victoria have handed over more than $41 billion in stamp duty payments on property since 2000-01, according to a new analysis of budget records.

In Victoria revenue from stamp duty on property more than doubled from $1.7 billion for the 2000-01 financial year to $4.2 billion in 2013-14, with budget forecasts showing it will top $5 billion this year.

Property Council of Australia research shows that Australia’s states and territories are collectively on track to reap a record $20 billion in conveyancing stamp duty for the current financial year alone, a threefold increase in 14 years.

Victorian Executive Director Jennifer Cunich said the burgeoning tax take from stamp duty, which Federal Treasury has identified as the tax with the highest cost to economic growth and living standards, must be on the table when federal, state and territory leaders meet this week.

“The Victorian government is reaping record gains from the growing stamp duty impost at the expense of homebuyers, housing affordability and the economy,” Ms Cunich said.

“Relying on homebuyers to bankroll the state’s budget to the tune of some $5 billion a year is hurting families and holding back Victoria’s economy.

“Stamp duty has spiralled out of control, stymying the creation of the new jobs and growth our state needs.

“The recent Victorian budget update revealed an extraordinary $400 million increase in property taxes collected over what was forecast.

“If we are to have a genuine national tax reform debate that examines ways to grow the economy, and is guided by principles of fairness, then stamp duty must be on the agenda.

“In two decades average stamp duty costs have increased by 795 per cent in Melbourne.

“Homebuyers have a right to question what they are getting in return for these astronomical increases.

 “Property is the state’s second biggest employer and pays 54.7% of all Victorian taxes, local government, fees and charges making it the largest single industry contributor.”

A comprehensive survey Community attitudes towards tax reform undertaken by Newgate Research earlier this year of 1,957 respondents nationwide found that nine out of ten Australians surveyed supported tax reform, which made the system simpler and fairer.

Three-quarters of Australians agreed that stamp duty is driving up home prices and making it unaffordable for young people to own their own home.

Over two thirds of the community (70%) supported the idea of abolishing stamp duty with the same number believing that the level of tax on people’s homes is too high.

Media contact:  Asher Judah   |  M 0499 841 715  E  [email protected]