Mosman property buyers paid over $90 million in stamp duty to the NSW Government last year — more than double that of any other suburb in the state, new research has found.
The NSW Stamp Duty Analysis, carried out by the Real Estate Institute of NSW (REINSW) showed Mosman chipped in an estimated $90,154,540 towards the State Government’s estimated $6.9 billion stamp duty windfall in the 12 months to October last year.
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Mosman eclipsed second-placed Randwick, which paid an estimated $43.9 million in stamp duty. Bellevue Hill held third position with $42m over the 12 months.
The analysis is based on the number of houses and units purchased over the past 12 months and calculated according to their median sales prices for the period.
A high number of sales and strong property prices are responsible for Mosman’s big result.
There were 315 house sales in Mosman during the analysis period, at a median sales price of $4.1 million, plus 386 unit sales at a median sales price of $1.135 million. The average stamp duty on a house in Mosman was $227,490 based on the median sales price, and on a unit, it is calculated at $47,915.
The remaining suburbs in the top 10 included Vaucluse ($39.8 million), Castle Hill ($36.3 million), Paddington ($32.9 million), Ryde ($32.1 million), Maroubra ($31.2 million), Chatswood ($30.1 million) and Manly ($30.4 million).
These suburbs collectively contributed an estimated $409 million of the total $6.9 billion in residential stamp duty paid to the NSW Government in that 12-month period.
Two other suburbs in the Mosman area also featured on the top 50 list. Neutral Bay property buyers forked out $17.1 million in stamp duty, and Cremorne buyers paid $19.7 million.
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The north shore had eight suburbs on the top 50 list, which together tipped a whopping $176.9 million into State Government coffers.
These include Chatswood ($30.1 million) St Ives ($26.5 million), St Leonards ($24 million), Pymble ($22 million), Turramurra ($19.6 million), Northbridge ($18.2 million), Lindfield ($18.2 million), and Roseville ($17.8 million).
REINSW CEO Tim McKibbin said the analysis revealed the extent to which the State Government was over charging buyers and unfairly distributing the tax burden, even despite recently announced adjustments to stamp duty intended to take place in July 2019.
“The government recently announced it will update stamp duty by indexing the current stamp duty tiers by CPI,” Mr McKibbin said.
“But the stamp duty tiers were created back in 1986, at a time when the median property price in NSW was between $80,000 and $300,000, and to offer to update the prices by an estimated two per cent is just a joke.”
The NSW Stamp Duty Analysis shows that under the government’s proposed changes, Mosman buyers would have paid $88.4 million in stamp duty last year — a saving of just $2 million.
This equates to an individual saving of about $4200 on the $227,490 in stamp duty paid for a house and about $1100 for the $47,915 paid for a unit in Mosman.
Chatswood buyers would have paid $30.1 million in stamp duty last year — a saving of just $500,000. This equates to an individual saving of about $1100 on the $107,590 in stamp duty paid for a house and the same for the $44,037.50 paid for a unit.
And as Mr McKibbin pointed out, buyers received “absolutely nothing” from the government in return for these charges.
“Research shows that stamp duty is a significant barrier to transacting and is regarded as a major cause of housing unaffordability in NSW,” Mr McKibbin said.
“It’s time the government did something serious about it.”
The REINSW is pushing hard to have property issues at the forefront of voters’ minds in the lead-up to this year’s State Election, and although he concedes it is a massive problem with no quick-fix solution, Mr McKibbin said stamp duty was a major priority.
But he said he was yet to see a commitment from either side of government to address what he said was one of the major contributors to housing inaffordability in Australia.
He conceded that the government had a major problem on its hands — working out how to more fairly charge stamp duty, while coming up with alternative revenue sources to what has become one of its biggest cash cows.
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Mr McKibbin said he believed there was a solution but it would require a lot of work, and there needed to be modelling done to find a way to balance the need to collect revenue with the need to keep buyers engaged in the market.
“I’m also in favour of finding other areas of revenue for government,” he said.
“Every time the government needs money, the go-to asset class is property and that isn’t right.”