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While first home buyer activity is set to benefit from government incentives, spiralling stamp duty costs could see existing home buyer activity falter.
According to a residential stamp duty report released by BankWest today, stamp duty on the typical Australian home has risen 59 per cent in just five years, almost double the rise of household income during the same time.
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In four out of eight capital cities – Sydney, Melbourne, Adelaide and Perth – home buyers must now set aside at least 20 per cent of annual incomes to cover stamp duty bills.
Home buyers in Sydney and Melbourne are particularly hindered by stamp duty costs, needing almost three months’ household income to cover the tax on median priced properties.
BankWest chief executive of retail Ian Corfield said the hefty costs would increase the incentive for existing home buyers is to stay put and renovate rather than buy a new house, compounding an already faltering market.
“This could mean lower sales, lower turnover, a flatter market and less choice for home buyers,” he said.
