The Property Council of Australia have recently released figures that reveal the eye watering extent of stamp duty increase all across the country.
Over the course of the last 20 years, stamp duty on the average home in the country’s capital cities has risen buy an alarming 660 per cent. This isn't because stamp duty has increased, but rather because the price of the average home has risen in NSW and Sydney in the last two decades.
This absurd increase demonstrates that something has gone wrong, however the Property Council’s proposal to abolish stamp duty simply isn't viable. The state governments would never agree to this solution as stamp duty is the most lucrative tax that they can levy directly.
For example, in Victoria property tax accounted for 41 per cent of tax collected in 2013-14, and in NSW it accounted for 31 per cent.
How is Stamp Duty Calculated?
Stamp duty is the tax you pay to the state government when you purchase a property. How much you will pay varies from state to state. For example, f you bought a house in Sydney for $880,000 you would pay the NSW government $35,090, for the same priced house in Melbourne, you would pay $32,282 in stamp duty, while in Perth, you’d pay the WA government $16,590.
These are large sums of money and as most people pay for it with their mortgage, it will also attract interest.
How much you pay will increase proportionately to how much the property you are buying costs.
In NSW, properties costing less than $300,000 are taxed at 3.5 per cent and properties between $300,000 and $1 million are taxed at 4.5 percent. Properties over $1 million are taxed at 5.5%
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If you are thinking about investing in property or for any other matters relating to property transactions or property disputes, contact Szabo & Associates Solicitors today. At Szabo & Associates Solicitors we can advise on all aspects of property law. Call us on 02 9281 5088.