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.”
Sentinel Sells Brisbane Industrial Site for $17m
Sentinel Property Group has offloaded another Brisbane site, this time an industrial facility 11 kilometres east of the Brisbane CBD in Hemmant for $17 million.
Centuria Capital snapped up the partially tenanted property in Brisbane’s east through Blue Commercial managing director Gary O’Shea.
The site, which comprises 47,951sq m of general industrial zoned land and features an 11,785 warehouse and 1,240sq m of office space, is located within the Trade Coast Precinct at 46-68 Gosport Street.
Sentinel’s Industrial Trust purchased the property for $16 million in 2012.
Sentinel’s divestment follows on from its recent sale of the Citilink Business Centre at Bowen Hills for $76 million to Prime Super.
The group also purchased the Makerston House office building in Brisbane CBD’s legal precinct for $103 million from investment management company Challenger.
Along with the Brisbane transactions Sentinel managing director Warren Ebert said the group, established by Ebert in 2010, has been active in regional Queensland.
“Particularly in Mackay where our portfolio is approaching $100 million,” Ebert said.
“Mackay has been an important regional market in the national growth and success of Sentinel over the past decade and the company has tremendous confidence in the region’s economic future, particularly with the opening up of the Galilee Basin with Adani’s Carmichael coal and rail project finally approved.”
Melbourne Top Investment Choice for Chinese Buyers
Chinese buyer enquiries for residential property in Australia has recorded two consecutive quarters of year-on-year growth for the first time since 2016, with Melbourne still the most popularAustralian city.
Australia has been losing Chinese buyer interest to other parts of the world due to increased taxes and banking restrictions.
But Australia’s hefty state foreign buyer taxes have been counterbalanced by its weakening dollar according to the latest Juwai.com report, which has seen it drop around 11 per cent of its value against the Chinese Yuan since mid-2018.
Juwai.com CEO Carrie Law says she expects Chinese buying to remain flat in 2019, with forecasts it could start to grow again inline Australia’s property market recovery.
“Chinese buyers make 83 per cent more enquiries about acquiring Melbourne property than they do Sydney,” Law said.
Brisbane has the second fastest rate of Chinese buyer growth. Law said Brisbane recorded 30.8 per cent more Chinese buyer enquiries in 2018.
“Brisbane is becoming a real alternative for the two traditional gateway cities of Melbourne and Sydney.
“The fastest growing cities, in terms of Chinese buyer interest, are Hobart, Brisbane, and Canberra.”
Melbourne receives 43.8 per cent of Chinese buying enquiries in Australia, Sydney 23.9 per cent, Brisbane 10.1 per cent, Perth and Adelaide 6.1 per cent, the Gold Coast 3.7 per cent, Canberra 3.6 per cent, and Hobart 2.6 per cent.
Weak Aussie dollar boosts buyer interest
Despite the tougher state foreign buyer taxes, Australian’s weakening dollar means it now costs less to secure real estate.
“A buyer holding Yuan today needs the equivalent of $88,800 less in funds compared to 2017 to purchase an $800,000 dwelling,” Law said.
“The plummeting Australian dollar, which has lost 11.1 per cent of its value against the Chinese Yuan since July 2018… [That] compares to the 8 per cent rate of the highest foreign buyer taxes, which are in New South Wales and Victoria.”
Law says Chinese demand is driven largely by growing wealth, a desire to store assets ‘safely’ overseas, education, travel, commercial ties, immigration and high-net-worth immigration, along with environment and lifestyle.
“Eighty-three per cent of Chinese consumers cite education as their reason for immigration, 69 per cent cite environment, 57 per cent cite food safety, and 28 per cent cite asset security.”
Australia’s Most Expensive Capital City to Rent a House Might Surprise You
When it comes to the nation’s most expensive capital city to rent a house, Sydney takes second place in what may come as a surprise to some, with Canberra crowned as Australia’s most expensive capital.
While Domain’s rental report shows Canberra remains as the nation’s most expensive capital to rent a house, it also shows it’s more expensive to rent a house in Hobart than Melbourne.
The latest report, which covers the median rental price for houses and units across the country, shows Melbourne house rents remained unchanged over the year at $430 per week, while unit rents increased 2.4 per cent over the year.
Taking in the unit market, despite Sydney’s price falls of almost 5 per cent over the year the harbour city is still the most expensive capital city to rent a unit.
Strong construction of new housing has weighed on rents in Sydney, and also contributed to the vacancy rate increasing to 3.2 per cent in June, up from 2.4 per cent one year ago, Domain’s Economist Trent Wiltshere says.
House rents fell by 3.6 per cent over the year to $530 per week.
While unit rents dropped by 0.9 per cent in the quarter and 4.5 per cent over the year.
“Rents held up the best on the Central Coast and on Sydney’s north shore, but fell in other Sydney regions,” the Domain report notes.
While largely thanks to the significant property price falls over the past few years, Sydney’s rental yields have risen slightly.
Melbourne’s strong population growth since 2013, averaging an annual 2.6 per cent, has seen ongoing rental demand.
House rents grew fastest in the Mornington Peninsula and in Melbourne’s inner-south, but were unchanged in Melbourne’s eastern suburb, for the past year.
Melbourne’s unit rents have increased by 2.4 per cent over the year.
While rent on a typical unit has increased 14 per cent over the past five years to $420, despite the city’s apartment construction boom during this time.
Melbourne’s house rents have also increased 13 per cent during this period.
Domain says unit rentals have held steady in recent years, despite the large supply of new Brisbane apartments.
“House rents were steady in most parts of Brisbane over the past 12-months, but unit rents increased 6 per cent in the inner city.”
Unit rents also increased by 2 per cent on the Gold Coast and the Sunshine Coast.
And while rental prices for houses across Greater Brisbanerecorded falls in the June quarter, rental prices have remained unchanged year-on-year.
Brisbane’s rental vacancy rate fell from 2.6 per cent to 2.2 per cent over the past year, a sign of a strengthening rental market, Wiltshere says.
House rents in Adelaide dropped 1 per cent in the June quarter, but have recorded an increase of 2.7 per cent over the year.
Adelaide’s unit rentals have increased by 1.7 per cent over the year, with the typical unit renting for around $305 a week, this makes Adelaide the cheapest across all capitals.
Hobart remains the fourth most expensive city to rent a house behind Canberra and Sydney, according to Domain’s report.
Canberra house rents dropped 3.5 per cent in the June quarter, but are unchanged over the year at $550 per week. Unit rents increased by 4.4 per cent over the year, sitting at $470.
Canberra unit rents have increased a staggering 18 per cent over the past three years, despite an apartment construction boom.
And Darwin rents for houses have now dropped from the 2014 highs of $700 a week to $490. Darwin units have dropped over the past five years from $570 to $385, reflecting declining demand as the city’s population decreases.
Perth remains the most affordable capital city to rent a house in Australia at $365 a week. Rental prices for both Perth houses (up 4.3 per cent) and units (up 3.3 per cent) have increased over the past year.
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