New research from the Property Council of Australia (PCA) claims that since the 2000/01 financial year government coffers have been inflated by $163 billion in stamp duty levies.
In the current financial year, the PCA predicts $20 billion in stamp duty revenue will be collected, compared to the $6.41 billion collected in 2000/01 and the $16 billion in 2013/14.
PCA chief executive officer Ken Morrison said the figures point to taxation system that is out of control.
“Stamp duty has spiralled out of control, stymying the creation of the new jobs and growth our nation needs,” Morrison said.
“Relying on property buyers to bankroll state and territory budgets to the tune of some $20 billion a year is hurting families and holding back Australia’s economy,” he said.
While tax reform has been a hot topic recently, Morrison said much of the speculation has been on arrangements at the federal level, with state governments avoiding similar scrutiny.
“Much of the focus in the national tax debate has been on areas of Commonwealth revenue and expenditure, but the spotlight needs to shine both ways.
“In two decades average stamp duty bills have increased around the country by between 527% in Hobart and 795% in Melbourne. Homebuyers have a right to question what they are getting in return for these astronomical increases.”
Housing Industry Association (HIA) senior economist Shane Garrett agreed with Morrison, and believes the states are becoming too dependent on stamp duty to help them balance their budgets.
“As state governments rely more and more on revenue from stamp duty, they have been blinded to the obvious consequences these costs have on prospective first home buyers,” Garrett said.
“The cost of stamp duty has a significant negative multiplier effect causing a downward financial spiral for households,” he said.
According to the HIA, the average national stamp duty bill in November was $19,045, a 7.9% increase since June.
In the individual states, the HIA claims average stamp duty costs are at their highest in the Northern Territory and Victoria at $25,600 and $24,700 respectively, while Queensland and Tasmania easily have the lowest payments at $6,300 and $9,300 respectively.
According to Morrison, the issue should be a centrepiece of a meeting later this week of State and Federal leaders.
“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,” he said.
“Stamp duty is a fundamentally unfair tax that hits everyday Australians hardest while also being one of the nation’s most inefficient taxes, acting as a handbrake on economic growth.”
