Australians are being hit with nearly an additional $100 in monthly mortgage payments thanks to the impact of stamp duty.
According to the latest Stamp Duty Watch report form the Housing Industry Association (HIA), a typical non-first home buyer owner occupier was hit with a stamp duty bill of $17,811 in June 2016, adding an additional 3.6% to the cost of purchasing a home.
According to the HIA, that sum accounts for four months’ worth of after tax income and significantly increases mortgage repayment, while also negatively impacting the economy and housing supply.
“By eroding deposits and making homebuyers borrow more, stamp duty is estimated to add $91 per month to household mortgage repayments for a median priced home,” HIA senior economist Shane Garrett said.
“Apart from hurting ordinary households, stamp duty restricts economic activity and obstructs the national dwelling stock from achieving its full potential in terms of the people it can house,” Garrett said.
While stamp duty has a significant impost on Australians looking to purchase property, foreign investors are feeling the pinch even more.
Combined with fees payable to the Foreign Investment Review Board (FIRB), stamp duty arrangements could mean foreign buyers are hit with a stamp duty bill of more than $50,000 in some states.
“Including the new FIRB application fee, foreign investors in Australia’s biggest rental markets now face major costs on entry. This is most severe in Melbourne, where the purchase of the typical unit involves almost $65,000 in stamp duty and fees,” Garrett said.
“The situation is not much better in Sydney, with foreign investors hit for over $58,000 on the acquisition of a unit of average price. Under the new rules, foreign investors in Brisbane units will be charged $29,000 in transaction taxes alone.
“Foreign investors act as key tenet of supply to the rental markets in Australia’s largest cities and conditions would be much tighter in their absence. These additional costs will act as a deterrent.”
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