Should Stamp Duty Be in a Property Advertised Price?

Should Stamp duty be in a property advertised price?

Once again prices of real estate is going up and up and with that comes increased government revenue from ‘stamp duty’

For those who don’t know ‘Stamp Duty’ is a tax that is paid on the transfer of land from one holder to another at the point of settlement. It can literally add 10s of 1000s of dollars possibly even 100s of 1000s of dollars to a property’s sale price. It serves little to no purpose other then to give money to your state government. Every state has a different rate of the duty with Victoria being the highest. Stamp duty was meant to be abolished with the introduction of the GST but it wasnt.

Considering we ‘include’ GST in an advertised price, as well as fuel excise tax why isn’t the duty incorporated into the price?

TL: Do you think stamp duty should be added to a property advertised price?

Update

I'll clarify because people a few questions have been asked - when you buy a house the price is variable the duty cost would be a 'estimate' on the quoted price….

For people with concessions you could easily put the duty cost in brackets like a cars on road costs

As for price variations at sale - THE SALES PRICE should be no more then 10% from the advertised price thus the difference in cost should be based around that 10% range… The fact the arguments im getting are the 'sales price' is somewhat unpredictable is more a problem with the system as a whole and lack of enforcement of under-quoting laws then anything else.

Lastly im surprised by the responses because i have always been a believer that the more information the better. But i guess some people like to just 'work it out on there own' which is fine but i personally think the current system is misleading but maybe im wrong.

Poll Options

  • 21
    Yes - Stamp duty should be incorporated the advertised price
  • 112
    No - Stamp duty should not be incorporated the advertised price

Comments

  • +9

    No, not everyone pays the same stamp duty because of concessions.

    • It doesn't need to be the same value the estimated stamp duty could be on the side of the asking price

      Thus if you have a concession you dont need to pay the duty value or you need to pay less of the duty value

      Ie a property is 500k (plus stamp duty 35k)

      • +6

        then that defeats the purpose , it would not be accurate.

        the main reason this would not work is house price is variable , it may be asking for 500k , but the offer may be 450k or 550k , and now that stamp duty amount is also now misleading.

  • +16

    I'd be happy just to see all agents advertise the real price they expect a property to sell for and not use clickbait prices let alone stamp duty.

    • As you know, interest rates are at a record low and banks are handing out money like candy. There's never been a better time to buy a house. We thought this four bedder with a large backyard next to a good school would only sell for 300,000 but the market surprised us. Just goes to show that I can quote any price I want and there's no enforcement of underquoting . A 4 million sale price is really a good outcome for the seller. I am such a good agent.

      Get in touch with me if you want a shoulder to cry on….just kidding. Get out.

      • every agent right now
    • Real estate agents in Oz are amongst the greediest on the planet. The whole industry needs to be shaken up like Uber and taxis.

      • +1

        Their job should be to get the best price they can for the vendor. Vendors should be happy that they will use every trick in the book to do so.

  • +15

    It's like you have just discovered stamp duty exists and you are really upset about it.

    Too many variables to include in advertising.

    • They do it for cars? ie they have the on road costs?

      I actually own 2 houses and have sold 2 in the past but i just thought people on Ozb would prefer more information when buying a product then less but clearly i was wrong…

      • Brand new cars have a set price usually. The on road costs won't change if haggled slightly. The on road costs are the same for everyone, except a very tiny proportion of the population, pensioners who get concessional registration (but they are very unlikely to be buying new cars). Not really the same compared to stamp duty, which can change a lot depending on the final price and a larger proportion of prospective buyers (compared to pensioners in the new car buying market) will get a discount on stamp duty.

        So two very different kettles of fish.

      • The difference is though that 'on roads' for a car is more than just stamp duty. It also includes:

        • Delivery Charges - set by the dealer
        • Registration - fixed regardless of sale price
        • Compulsory Third Party Insurance - fixed regardless of sale price

        So a dealer can give a 'drive away' price with reasonable accuracy.

        And as others have alluded to, stamp duty barely varies in the purchase of a car versus the purchase of a house. Get $5k off a $50k car (which is very optimistic in the current market, but anyhow) and you look at a $150 saving in stamp duty. The difference between a $550k property as an investment vs paying $515k as a PPR means a $8,500 difference in stamp duty. (these are Qld rates and concessions btw)

      • If you're going to use the car comparison, what about used cars? You still pay stamp duty on a used car and it's not listed in the purchase price. It is on a new car, so should be on a new house (which is nothing if you're building it).

  • +1

    No

  • Once again prices of real estate is going up and up and with that comes increased government revenue from ‘stamp duty’

    Not necessarily…

    • I agree with @jv on this one. Previously the market had foreign buyers who were required to pay an additional 7 per cent in Victoria. Now mostly are domestic buyers, taking advantage on the discount on stamp duty or first home buyer concessions. So, it may not be true that government is making more money.
      Also, GST is payable only on supply of new residential property. Most new properties selling would have draft contracts saying plus GST. But as price isn’t known until contract is exchanged, it is not possible to put in exact $$$ values for GST. For stamp duty, there is sufficient advice to the buyers from their lenders and CAV.

  • +2

    The advertised property price is usually not even the price the owner put down. Why make it more fudged?

    • -2

      The advertised price SHOULD by law be within 10% of the sales price ….

      Im not saying that happens btw

      • I don't mind that sellers get bidding wars sometimes. What I do mind is that they refuse their listed price as an offer and never sell to anyone. "We're just looking for expressions of interest" "Agent underestimated the actual value of house" or other crap excuses for the bait and switch.

        • they refuse their listed price as an offer and never sell to anyone.

          it's because the listed price is there to attract eyes. Then, the seller (or agent) is hoping to get a bidding war from the increased interest, and thus, attain the maximum selling price.

          If there's one or two offers at the listing price, then it won't satisfy, as the owner can't be sure that they've squeezed the maximum price out of all potential buyers. This is especially true if the owners don't need to sell, but will for a high(er) than average price.

      • err what?

        And what happens if someone offers you more?

        a) No sir/madam/other, I will not accept this extra money you are offering for I have set my price and will not be swayed. Now good day sir/madam/other. I said good day!
        b) Seller takes property off market and immediately puts it back on with a higher price.
        c) No price is given and Expressions of Interest or offers expected from buyer.
        d) Everything gets sold at auction with no price guide which gives you even less understanding of the price something will sell for.

  • There's a lot wrong with the process of buying property in Australia. In the list of things that's busted, this one's a long way down the list.

    • In the list of things that's busted, this one's a long way down the list.

      This isn't busted though…

      • +2

        Trying to be generous to the OP.

  • +3

    How would it work if the property gets sold via an auction?

    • +1

      live Stamp Duty updates ?

      • +1

        A browser ticker.

    • -1

      A property shouldnt sell for more/less then 10% of an advertised price otherwise it is under quoted….

      Thus the buyer should have an idea what the upper limit of the price could be?

      • +3

        if you were the seller of a property for $1 million and an emotional buyer wants that house because that's the house they grew up in and offered you $1.5 would you give the buyer a discount and only sell to them for $1.1 Million and walk away with fuzzy feelings.

        i'm not saying agents don't have a responsibility to be more transparent.

        but any rules like

        A property shouldn't sell for more/less then 10% of an advertised price

        is silly

        • -3

          No it isn't because the advertised price would be within 10% of the reserve price if two buyers are emotional that are allowed to battle it out but the reserve needs to be within advertised levels

          • @Trying2SaveABuck: How silly.

            The seller just takes it off the market, and then re advertises it.

            Or they just advertise "Expressions of Interest" EOI.

            Or you get the same crazy system now, where you wont see an advertised price.

            With a booming market 10% more could be reached in a day. And how can you estimate an auction price.

            LIke you bid $500K on a house listed for $600K and get it, but then you are forced to pay $550K because its illegal to buy 10% less.

      • Thus the buyer should have an idea what the upper limit of the price could be?

        By that logic, the buyer should also have an idea what the stamp duty should be in their price range.

        • Of course they should - if you're buying a house you should know the costs HOWEVER it is one of the few things in Australia where the taxes are not advertised in the sales price

          Considering how big of a tax i have always found it surprising

  • -1

    lol

  • +4

    If buyers can't work out the stamp duty on their purchase then may be they should consider investing $100000s in something that they understand.

  • Considering we ‘include’ GST in an advertised price, as well as fuel excise tax why isn’t the duty incorporated into the price?

    Too many variables, unlike your GST or excise, which are 'flat' rate taxes.

    Use a stamp duty calculator to estimate in advance the stamp duty you are up for, whether you are planning to purchase from an auction or "for sale".

  • This won't work as they are too many variables eg. no set price for auctions, negotiations in private sales, concessions. This idea is the same as job advertisements listing the salary after tax (again, too many variables).

    • -1

      No it is more like when they advertise a job and say you base salary is 75k-80k + plus 9.5% super and car allowance - these are variable on some level but they give the applicant an idea of the remuneration.

      You dont advertise a 120k packaged contract at 90k then tell them on the day they sign you're getting an additional 30k in super, car, phone allowance etc - you get better applicants on just advertising the whole package

  • +2

    I get the intent of the OP and also get the response that it varies between individual circumstances. I looked at the Victoria state revenue office site on property stamp duty the other day and it made my head spin.

    Therefore the actual problem that I see is that the whole property "stamp duty" system is broken and overcomplicated. Many things in the tax systems have been simplified, like GST. Part of the original GST architecture was the removal of the state stamp duties but that never got through. Had it been implemented you would now easily be able to have house prices as advertised inclusive of taxes.

  • +1

    How about included estimated legal fees, inspection costs, etc. Also possible reno costs?

    • They are optional though.

      • NSW stamp duty model changing.

    • +1

      dont forget

      • what the rates are
      • whether u can get NBN or no
      • expected electric rates
      • gas rates
      • expected insurance rates (is it in flood prone lane, earthquake etc)

      • bank fees

      • how much tradies cost around this area
      • distance to train station
  • Anyone researching buying a house should know how much the scam.. I mean Stamp duty is.
    if your shopping at 500k - you work it out.. if your shopping at 750k - same.

  • No Stamp Duty should not be in the price because it is so easily ascertained, either by using your State's OSR's calculator or your conveyancer will know within 30 seconds.

  • It would be interesting to know at the point of sale (a bit like the home loan comparison rate) although i agree with what others have said, it's pretty easy to just look it up.

    Knowing this though it would be useful to know the hidden costs associated such as a conveyancer as these can reach $10,000 or so which is a big chunk of anyones deposit.

  • Buying a home is such a significant purchase that I think it is obvious that a fair amount of research should go into the process for the potential buyer.

    Regardless of where you stand on Stamp Duty it is still the buyer's responsibility to learn about this, or at a minimum be advised by a conveyancer employed to professionally check the documents during the purchase process.

    The problem with including Stamp Duty in an advertised price is that it may vary depending on who is buying (First Home Buyer?) and whatever additional exemptions the state government happen to be applying at the time in order to fuel an already ridiculous economic bubble.

  • Why can't realestate or domain automatically ad in the stamp duty by asking you your personal circumstances

    • They probably could if buyers paid for it.

      • There's no option to pay?

        A buyers account with extra service is something I would pay for. Especially if it flagged which ones are dreamers and how long on market etc