Canberrans and Brisbanites pay the lowest stamp duty of all capitals when buying property, a new data analysis reveals.
On the national median house price of $756,387, Brisbane buyers would pay 2.6 per cent – or $19,887 – on stamp duty on their property purchase, according to the analysis by Domain.
Stamp duty on a purchase at Brisbane’s median house price of $563,559 would be even less – 2 per cent, or $11,210.
The analysis did not include any state government-led stamp duty concessions, therefore modelling a more likely scenario for established owner-occupiers.
“The lowest values of stamp duty are being paid in Brisbane and that is largely because of the significant concessions for owner-occupiers,” Domain research analyst Eliza Owen said.
“So whether you’re looking at a typical price across Brisbane or all of Australia, the stamp duty equates between one to 3 per cent.”
On a purchase at the national median of $756,387 in Canberra, stamp duty would be 3 per cent of the purchase, or $22,578. At Canberra’s median house price of $727,096, stamp duty is $21,210.
The ACT is in the midst of a 20-year radical tax reform, abolishing stamp duty and replacing it with broad-based land tax.
The transition would eventually remove one of the significant barriers to property ownership and would level the playing field, according to Housing Industry Association economist Angela Lillicrap.
“Instead of the taxation revenue being paid by just the people who are buying a property in the market, it’s being replaced by everyone who owns property in the ACT,” Ms Lillicrap said.
“If you replace stamp duty with an alternative broad-based tax, it would provide a consistent, reliable revenue stream.”
Ms Lillicrap said the ACT Treasury had the lowest dependence on stamp duty, accounting for 13 per cent of total taxation revenue raised in 2018-19.
It sits in stark contrast with Victoria, Tasmania and NSW where the reliance on stamp duty accounted for more than one-fifth of all taxation revenue raised in the same year, the association found.
The NSW government has forgone $10.6 billion in lost stamp duty revenue due to slowing sales and falling prices during Sydney’s property downturn of the past two years.
Meanwhile, Victoria has revised its stamp duty revenue down by $5.2 billion.
Melburnians pay the highest stamp duties in the country, followed by Adelaide and Sydney.
On the purchase of the national median house price, stamp duty costs a Melbourne buyer 5.3 per cent – or $40,453.
Stamp duty would cost even more at Melbourne median house price of $814,677, accounting for 5.4 per cent of the purchase price or $43.951.
And stamp duties remained the highest in Melbourne even when purchasing a unit, costing 4.5 per cent of the national unit median price or $23,943.
Adelaide buyers paid the second-highest portion of stamp duty at 4.7 per cent of the national median house price and 4.4 per cent at its city’s median house price of $541,060.
It sets a Sydneysider back $29,469 – or 3.9 per cent – at the national median house price.
That figure jumps to $41,789, or 4.1 per cent, at Sydney’s median house price of $1,027,042.
Brisbane and Canberra buyers would pay even less on stamp duty when buying a unit at the national median unit price of $532,878.
Stamp duty sets back Brisbane unit buyers $9901 or 1.9 per cent.
On the purchase of Brisbane median unit price of $373,713, stamp duty costs 1.2 per cent.
Stamp duty would set back Canberra unit buyers $12,821 or 2.4 per cent.
On the purchase of Canberra’s unit price of $437,684, stamp duty costs even less at 2.1 per cent.
Grattan Institute program director of household finances Brendan Coates said stamp duty was an easy, silent tax that governments were happy to apply.
“You can ratchet up the rate, you only pay once and you don’t notice it in the same way as a personal income tax,” Mr Coates said.
“In the same way with bracket creep for personal income tax, it also applies to stamp duty. Most states don’t index to [a] change in property values.”
As a result, the economic drag of stamp duties has increased over the past two decades, Mr Coates said.
“Average rates of stamp duty have risen substantially in all states, from around 2 to 3 per cent on the median-priced house in each capital city in 1995 to around 4 per cent today, because thresholds have not kept pace with rising house prices.”
He said the tax was unfair because it penalised people for moving for better job opportunities and discouraged property owners from downsizing.
“One family could pay more tax than another with similar income and assets, simply because it moves house more often. Stamp duties especially penalise young people, who tend to be more mobile,” Mr Coates said.
“The effects of stamp duty are material: one study found that a 10 per cent increase in stamp duty can reduce housing turnover by 3 per cent immediately, and 6 per cent in the long run.”
Brisbane rents: Landlords in ‘rosier position’ as unit oversupply eases
Brisbane rents are creeping up and the proportion of vacant homes is inching down, as the city’s rental market recovers from years of oversupply, experts say.
Asking rents for units rose 1.3 per cent to a median $380 a week over the past year, the latest figures from the Domain Rental Report for the September quarter show.
House rents also edged up 1.3 per cent to a median $405 over the same time period, according to the report released on Thursday.
The combined vacancy rate fell 0.1 percentage points to 2.2 per cent during the September quarter.
It comes after a wave of new apartments were built in Brisbane’s inner city in recent years, with the extra supply keeping a lid on rents.
Domain research analyst Eliza Owen said the market was now in good health, despite appearing to be near-stagnant.
Median weekly asking rents for units
|REGION||SEP-19||JUN-19||SEP-18||QOQ % ∆||YOY % ∆|
|Brisbane – City wide||$380||$380||$375||0.0%||1.3%|
|Brisbane – East||$405||$405||$400||0.0%||1.3%|
|Brisbane – North||$370||$365||$363||1.4%||2.1%|
|Brisbane – South||$385||$380||$375||1.3%||2.7%|
|Brisbane – West||$400||$415||$390||-3.6%||2.6%|
|Brisbane Inner City||$420||$425||$410||-1.2%||2.4%|
|Moreton Bay – North||$315||$315||$310||0.0%||1.6%|
|Moreton Bay – South||$340||$335||$335||1.5%||1.5%|
For units, the stability was a positive story compared to oversupply-induced market weakness a few years back, Ms Owen said.
“There’s been a lot of fear about over-development but in the building space there’s been tightening of dwelling completions,” she said. “They’ve come down sharply and are returning to long-run average levels.”
Rents were now trending up and vacancy rates down, she said.
“The picture for south-east Queensland in terms of rental returns is pretty good, it’s also one of the most affordable rental markets for houses.”
Ms Owen said interstate migration, mostly from Sydney, was a major factor in keeping the rental market balanced.
“The tightening of the rental market is off the back of strong population growth and a very affordable lifestyle, and this is reflected in the rental vacancy rate which is down to 2.2 per cent from 2.6 in the previous year,” she said.
Investec Lists Fortitude Valley Office Tower
The newly-listed Investec Australia Property Fund will divest its 11-storey Fortitude Valley office building with an expected price north of $90 million as it moves to recycle capital.
Fresh off the heels of its fully underwritten institutional placement and purchase of three industrial properties in the Northern Territory, Western Australia and South Australia for $84 million last month, Investec has motioned to sell its Brisbane, 757 Ann Street, tower.
Investec purchasted the Nettleton Tribe-designed tower for 68.5 million after it was completed in 2014.
Comprising 9,422sq m of office space with a weighted average lease expiry of approximately five years, the A-grade building, anchored by technology company Asea Brown Boveri, is 100 per cent leased.
Cushman & Wakefield’s Mike Walsh and Peter Court are managing the international expression of interest campaign, to kick off mid-October, with expectations it will generate strong interest from domestic and off-shore institutions, funds and syndication groups.
“The entire commercial component of the asset is structured on a net lease basis, providing smooth, predictable cash flow for investors,” Court said.
Sales over the first half of the year surpassed the total volume of sales over 2018—reaching $1.2 billion, according to Colliers research, with Australian institutional investors dominating the lion share of transactions.
Commercial assets currently on the market include Perth-based investor RG Property’s 410 Queen Street in Brisbane’s ‘golden triangle’.
Recent Brisbane assets changing hands include the sale of the Jubilee Place Office development at nearby 470 St Pauls Terrace to a real estate fund managed by Credit Suisse, Malaysian-backed HCK’s 116 Adelaide street for $30 million, and QIC’s Q&A Centre at 141 Queen Street and 140 Elizabeth Street which sold to Taiwanese developer Shayher Group.
As for development plans in the Fortitude Valley precinct, Sydney fund manager Millinium Capital in August announced plans for a new university campus and 30-storey tower that would comprise student accomodation, co-living and co-working space at 240 Brunswick Street and 11 Overells Lane.
Australian property management startup raises $3.5 million, expands to Brisbane
Australian proptech startup :Different has announced it raised $3.5 million in its latest funding round to continue its national expansion.
The fund raising coincides with the company’s launch into Brisbane today.
:Different is a full-service property management startup where property owners pay a fixed fee of $100 per month instead of a percentage based on the rental price of the property.
The appeal of :Different is their tech base which automates the everyday tasks of a property manager.
:Different’s owner app provides 24/7 access to documents like lease agreements, statements, and maintenance requests, while the tenant app helps streamline requests and fast track communications.
Over the last 12 months, :Different’s customer base has grown five folds with more than $700 million worth of properties now under management across New South Wales and Victoria, while its team has quadrupled to 32.
The latest funding round supports :Different’s ambitions to expand into new markets, further enhance its tech platform and continue to build its team of expert property managers, said Mina Radhakrishnan, Co-Founder at :Different.
“We’ve already had huge success since launching in Sydney and Melbourne, and we’re thrilled to offer the same great offering to Queenslanders,” Radhakrishnan said.
“We have big growth ambitions for :Different. This latest funding round will help us continue to rebuild property management in Australia and beyond.”
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