‘Costly’: Hobart stamp duty six times higher than the ‘80s

Homebuyers are being slugged tens of thousands more in stamp duty now than they were in the 1980s, new figures reveal. But there is a fix.

Stamp duty costs when buying a home are six times higher now in Hobart than they were a few decades ago. Picture: Supplied

A FIVE-FIGURE cost is putting the brakes on those who wish to buy the right size home for their needs.

A PropTrack and e61 Institute report shows Hobart homebuyers purchasing a median priced property, about $657,000, will need to save $24,900 for stamp duty.

This is the equivalent of 3.6 months of average full-time post-tax income.

That is six-times higher than it was in the early-to-mid 1980s when the tax was equivalent to $900 or 0.6 months of income.

PropTrack senior economist Angus Moore said stamp duty is a barrier to entering the housing market.

He said it is “very costly” and an inefficient tax, because it discourages people from moving to homes that suit their needs.

“Stamp duty reform is critically needed to allow the property market to operate more efficiently,” he said.

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Hobart buyers are paying about $24,000 in duty on a typical home.

e61 Institute research manager Nick Garvin said their research highlights the indirect impacts of stamp duty on people’s lives, including whether they change jobs or decide to start a family.

Dr Garvin said an overhaul of the current stamp duty system has the potential to alleviate these pressures on individuals and the economy more broadly.

“Housing affordability and availability is a challenge of our time,” he said.

View Tasmania chief executive Adrian Kelly said the stamp duty issue goes back more than 20 years to the introduction of the GST.

“When the GST was introduced, the promise was made that state taxes would be abolished, such as land tax and stamp duty, in particular,” Mr Kelly said.

“But that never happened. Now we pay GST and inefficient taxes such as stamp duty.

“Stamp duty is at the whim of the market, which makes it a challenge for governments to budget properly, especially if property transactions and prices are down.”

PropTrack economist Angus Moore.

Mr Kelly said stamp duty impacts first-time buyers and creates a hurdle that they have to find, “in cold hard cash and upfront” at the time of purchase.

“Generally, they have to borrow it,” he said.

“There has been a bit of talk around the most efficient way to still have the funds for the government to provide services to the community and to remove land tax and stamp duty, and that is to increase the GST.

“I suspect few governments would do it, but it is a simple fix.

“It may take a strong, second-term federal government to attempt it. And among the challenges would be getting all the states to agree.

“If something like this was brought in, everybody would pay, just like they do now, and it wouldn’t need to be a huge increase. It would be the ultimate ‘quick fix’.

“Not forgetting, GST doesn’t apply to rents, so renters would be protected.”

View Tasmania’s Adrian Kelly.

Per the Tasmanian Government State Revenue Office, stamp duty is payable within three months of the date of a dutiable transaction.

For housing, this is usually the date of settlement.

In the 2023-24 Tasmanian Budget, a 50 per cent discount on property transfer duty available to first-home buyers and pensioners seeking to downsize was extended to June 30, 2024.

On the election campaign trail last weekend, Premier Jeremy Rockliff and Housing Minister Nic Street announced a plan to scrap stamp duty for first-home buyers when purchasing an existing house, unit or apartment. This will apply to homes valued up to $750,000.

Originally published as ‘Costly’: Hobart stamp duty six times higher than the ‘80s