Brisbane, particularly among east coast cities, has sustained house price growth even as Sydney and Melbourne have lost steam. With stamp duty remaining inert for several years, and Brisbane becoming Australia’s ‘property darling’, more and more buyers are inevitably paying higher stamp duty, and earlier on in their home buying journey. So, is it time to bump up the threshold?
The case for increasing Queensland’s stamp duty threshold
CoreLogic data from October 2021 shows Brisbane had an annual property price growth of 22.30%, and the median dwelling value now sits at $642,097 - more than $100,000 higher than the threshold in which many buyers start to pay stamp duty.
Queensland first home buyers usually do not pay any stamp duty until $540,000. However, the median dwelling value (dwellings include units - not just houses) is $642,097. That equates to nearly $15,000 in duties payable if you’re a first home buyer or owner occupier. If you’re a property investor it’s nearly $22,000.
And that’s the median dwelling value for Brisbane. Analysis of Aussie Home Loans' ‘Suburb Spotter’ tool with a 20% deposit on the median shows not much in Brisbane is available (pictured below) in terms of houses - certainly nothing within 10km of the CBD. This implies you’ll have to spend a lot more, and hence a lot more in stamp duty, to be within coo-ee of the capital.
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Source: Aussie Home Loans
Head of research at Propertyology Simon Pressley told Savings.com.au Queensland’s stamp duty is still more favourable compared to its southern neighbours'.
“House prices have already increased by circa 20 percent over the last 12-months and the volume of transactions increased sharply. This means state governments are clicking a lot more tickets and taking a bigger slice off the back of property buyers,” Mr Pressley said.
“Aside from a poorly-performing apartment, one can’t get much in Brisbane for under $800,000 these days. Stamp duty on that is $22,000 for owner-occupiers while that same property will cost $29,000 in stamp duty if the buyer is an investor.
“Queensland’s stamp duty is more gentle on the household budget relative to other states. Stamp duty on an $800,000 dwelling is $31,000 in NSW and Tasmania, $38,000 in SA and a whopping $43,000 in Victoria.”
Savings.com.au contacted the office of Queensland Housing Minister Leeanne Enoch for comment, but they did not respond in time for deadline.
Propertyology's Simon Pressley. Image supplied.
Stamp duty or property tax?
Mr Pressley said stamp duty was a “political football”.
“Taxing those who transact in real estate is every state government’s biggest revenue source. This revenue is what funds state infrastructure and public sector jobs,” he said.
Instead, Mr Pressley favoured a property tax.
“Taxing people several years of cash savings to buy a piece of real estate is incredibly inefficient. It suppresses fundamental aspirations like accommodating a growing family, pursuing a job promotion, improving their lifestyle and investing in their future,” he said.
“NSW has proposed a new model that gives property buyers the option of paying a one-off large stamp duty or a much smaller land tax every single year will be interesting to observe. I think it’s a step in the right direction.”
See also: Why a property tax is not the answer
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