Home buyers in 70 NSW suburbs were forced to cough up an average of more than $100,000 in stamp duty last year.
The charges were for home purchases spread across Sydney, including in suburbs in the inner west, north shore, Central Coast and Western Sydney.
The payments boosted state government stamp duty revenue to a total $8.4 billion for the 2018 financial year, according to sales analysis by the Real Estate Institute of NSW.
Buyers in Tamarama had the highest average stamp duty bills at about $362,000 — enough to buy an apartment outright in Wollongong — but even buyers in cheap suburbs faced stiff charges.
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Detached house buyers in Blacktown paid an average of just under $30,000 in stamp duty, while Penrith buyers paid nearly $27,000.
A buyer paying Sydney’s median house price of $970,000 would have paid just under $40,000 in stamp duty, while buyers paying the Sydney median unit price of $720,000 would have forked up $28,000 in tax.
REINSW CEO Tim McKibbin said stamp duty charges were so excessive many would-be buyers could no longer afford homes.
Others were abandoning the market rather than pay “dead money”, he said.
“When I hand over my (say) $200,000 to the government, I get nothing, absolutely nothing,” Mr McKibbin said.
Successive state governments have refused to overhaul the tax, which is calculated based on price tiers created in 1986, at a time when the median house price was $93,000 and the median unit price was $85,000.
“When the Treasure of the day in 1986 introduced the current rates of tax he said that the higher rates of tax would only apply to those properties over $300,000,” Mr McKibbin said. “You would be hard-pressed to find anything in Sydney to buy for $300,000.”
Years of inaction have left both major parties overly reliant on stamp duty revenue.
“They’re addicted to it now, and they don’t know how to switch off the river of gold,” Mr McKibbin said.
“It will take a huge amount of political courage to take this problem on.”
The state government’s recent announcement that it would change stamp duty rates in July this year by indexing the old rates to current inflation would not do enough, Mr McKibbin added.
“The (changes) are really just chump change … by our calculations (it) will only marginally affect how much property buyers have to pay in duty.”
Liz and Michael Short recently paid $60,000 in stamp duty after buying a new home in Bonnett Bay for $1.33 million and said one of the most frustrating parts of the tax was not knowing where it went.
“It hurt a lot,” she said. “If I knew where it was going and I knew it was for a purpose I think I would be okay with that, but I have no idea.”
The couple had a tight budget and the stamp duty bill prevented them from doing the renovations they wanted, she said.
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“Stamp duty definitely did impact how much we could afford to pay,” Ms Short said. “I can see how people get caught out if they don’t think about it.”
Stamp duty was a major cause of housing unaffordability,” Mr McKibbin said.
“If the government is serious about stamp duty reform, it should realign the stamp duty tiers to reflect the median price of property across Sydney, which is $970,000 for houses and $720,000 for units.”
SUBURBS WHERE AVG STAMP DUTY BILL EXCEEDS $100K
Randwick — $120,515
Chatswood — $107,590
Manly — $172,190
Strathfield — $129,315
Cronulla — $106,490
Woollahra — $178,490
Pymble — $112,815
Bondi Beach — $146,365
Lindfield — $131,103
Drummoyne — $103,740
Neutral Bay — $115,565
Roseville — $134,540
Coogee — $142,240
Rose Bay — $196,900
Paddington — $112,953
Northbridge — $195,990
North Bondi — $140,865