Homebuyers slugged with 800 tax increase

Homebuyers slugged with 800% tax increaseAverage stamp duty costs have increased by up to 795 per cent in the last 20 years, new analysis from the Property Council of Australia reveals.According to the Property Council’s chief executive Ken Morrison, stamp duty has become a “runaway cash grab” that is “hurting Australia’s economy and locking out potential homebuyers”.Analysis from the Property Council has found the true cost of stamp duty over the life of an average mortgage is now $61,542 in Sydney, $56,616 in Melbourne, $14,733 in Brisbane, $21,564 in Hobart, $33,654 in Perth, $35,427 in Canberra, $30,393 in Adelaide and $49,701 in Darwin.”These astounding increases in the costs of stamp duty are nothing short of scandalous,” Morrison says. “The community should be outraged that they are being slugged with such excessive charges, especially at a time when housing affordability is an acute challenge.”In its recent submission to the Re:think Tax Discussion Paper, the Property Council argued that that abolishing stamp duty must be a top priority of national tax reform and for every government in Australia.The submission also provides a host of recommendations to strengthen Australia’s investment frameworks and make land tax less punitive for investment.Property owners are now Australia’s largest collective taxpayer, contributing nine per cent of total tax revenue, compared to an OECD average of just five per cent. Property taxes make up to 46 per cent of state, territory and local government budgets, with no other asset class subject to such a high level of taxation.The Property Council has commissioned detail research on improved taxation models as part of its submission to the tax white paper, which recommends replacing stamp duty with more efficient and less damaging revenue sources such as GST.”Both the Henry Tax Review and the recent tax discussion paper identified stamp duty as the tax with highest costs to economic growth and living standards,” Morrison says.”Taxes are supposed to lean lightly on the economy, not act as a barrier to economic activity, job creation and prosperity – but that is exactly what stamp duty does.”