Queensland residential real estate affordability is under threat as the Government’s stamp duty cash grab increased by $273 million from FY2016 to FY2017, ABS data for the financial year 2017 has revealed.
Queensland State Government coffers have received a plumped up injection of $3.278 billion in stamp duty on conveyances in FY2017, compared with $3.005 billion in FY2016.
This increase means more than 25 per cent of the total taxation revenue in Queensland is coming from stamp duty on conveyances. When land tax and other taxes on property are added to the equation, more than 38 per cent of the total taxation revenue comes from property-related taxes or the equivalent to about $5 billion in FY2017.
Stamp duty on conveyances revenue contribution has increased from 17 per cent in FY 2013 to 25 per cent to June 30, 2017.
Stamp duty on conveyances is the second-largest contributor to the Queensland coffers behind payroll tax, which delivered a hefty $3.695 billion last financial year.
REIQ CEO Antonia Mercorella said the State Government was taking too much from the property sector.
“We have good affordability in our residential market and great affordability in our commercial market, but rising stamp duty costs are threatening that affordability,” she said.
“In residential real estate, hefty stamp duty costs serve to stifle housing mobility. Upgraders and downsizers put off the next move because of the onerous stamp duty they will have to pay when they move,” Ms Mercorella said.
“An upgrader moving from a $500,000 home to a $750,000 home would be forced to pay an estimated $20,000 in stamp duty, on top of the cost of their new home, along with various costs associated with buying and selling property,” she said.
“The reality is simply that stamp duty is threatening our affordability,” she said. “The REIQ has long advocated for the abolition of stamp duty. It does the property sector no favours and the State Government is now in danger of killing off the golden goose,” she said.
The Henry Tax Review found that stamp duty was an inefficient tax that led to housing problems.
The full abolition of stamp duty would serve to increase housing affordability for all Queenslanders and result in a dramatic boost to property transactions. It would also help unleash a flurry of economic activity that would have a positive kick-on effect not only in real estate, but throughout the Queensland economy.
Abolition of stamp duty will:
- Allow new homeowners to put the subsequent savings towards paying off the cost of their new home;
- Make purchasing a home more affordable for the average Queenslander; and
- Provide greater flexibility and choice for aspiring home-owners.
It is nothing more than an inefficient and regressive tax that stymies economic activity in the real estate sector.
The system needs to be reformed and a modern property tax process needs to be introduced.