Properties in Adelaide that are at or below market value could be exempt from stamp duty under new proposals from the real estate industry. Condemning the state government’s current approach to property tax, experts are attempting to push forward reforms to, what they call, “exorbitant and debilitating” stamp duty. The levy in Adelaide is the highest in any state, with first-home buyers paying AU$15,830 (£8,509.73) on the median house price of $390,000.
According to Greg Troughton, Real Estate Institute of South Australia chief executive, this high rate of stamp duty is acting as a deterrent to investment in the state. “Coupled with land tax, we have heavy cost imposts on housing which are causing real stress for everyday South Australians,” he said. “The South Australian government’s reliance on stamp duty is significant and can’t be ignored, but are we really assisting the economy by incarcerating potential investment in South Australia?”
Should new proposals be accepted, those buying some of the cheapest properties in Adelaide would be able to benefit from stamp duty exemption – a move that will certainly help low income families and those trying to get onto the property ladder. The reforms could also inspire investment in construction, with demand for low-cost housing inspiring developers to build cheaper stock.
Affordability is certainly becoming an issue in Australia and prices are continuing to rise. However, Andrew Wilson, senior economist at Australian Property Monitors, claims gains aren’t occurring at the same pace nationwide. Indeed, it is those areas with strong underlying factors that are pulling ahead and driving the country’s average house price upwards. Sydney is one such location where values have increased significantly. According to data from BIS Shrapnel, property prices in the city have risen seven per cent over the year. This is a feat not seen in Sydney for some time.
There are also other trends in the housing market which could have a knock-on effect for Adelaide. Mr Wilson explained: “Markets have been headed the same direction more or less, but the gears have been different. There’s a multi-speed scenario unfolding in markets and there has been a divergence in housing market activity. Some markets have clearly been engaging buyers at a much higher level.”