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High-value real estate transactions often come with significant stamp duty costs.
This government-imposed tax on property purchases is determined by the property’s market value and varies across different states and territories.
In Sydney, for instance, purchasing a home at the median price of $1.75 million incurs a stamp duty of $78,262.
Meanwhile, in Melbourne, the stamp duty for a property valued at the median price of $1.083 million amounts to $62,326.
While some states and territories offer exemptions or reductions in stamp duty, these benefits are typically reserved for first-time homebuyers, excluding those who have owned homes before.
Combine that with cleaning and moving fees, along with conveyencer and agent fees and the upfront costs are staggering.
Data even shows that one-third of the baby boomer generation feels as though their homes are too big for them.
“For downsizers, it means paying up to $100,000 in tax just to free up equity and move to a more suitable home,” Yardney said.
“So it’s no surprise then that many choose to stay put rather than incur a huge tax cost just to buy a smaller place.”
“When they look around for a smaller, well-appointed, accessible home nearby, they often come up empty,” he said.
“The middle-ring suburbs of our major cities are woefully underdeveloped when it comes to medium-density housing.
“This is where boomers live, and where they’d like to stay, but development has been stifled for years by local councils and resistance to change.”
Yardney said waiving or reducing stamp duty for Australians moving into their “final home” could unlock a new generation of properties.
The current stamp duty fees are only deincentivising retirees from freeing up family homes for the next generation, Yardney explained.
“It would materially lower the cost of downsizing and would unlock a large pool of mid-sized and large homes for the market, easing housing supply and providing retirees with more choice and financial flexibility,” he added.
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