Stamp duty has a detrimental effect on household finances because it indirectly forces mortgage payments up says the Housing Industry Association Senior Economist, Shane Garrett.

 

“Home-buyers have smaller deposits after stamp duty is paid and must bear larger mortgage debt,” he said. “As a result, significantly higher LMI charges must then be paid. On a standard home purchase of $527,000, stamp duty can push the LMI premium up by another $7,855. If that’s not bad enough, a further layer of mortgage interest is added on top of the LMI premium if it is capitalised.

 

“The end result is that the typical stamp duty bill of $19,045 can snowball up to about $50,000 once LMI and mortgage interest are factored in.”

 

During November 2015, NT homebuyers paid the highest stamp duty ($25,600), followed by Victoria ($24,700) and NSW ($23,600). Queensland had the lowest stamp duty ($6,300), followed by Tasmania ($9,300). Stamp duty bills are the fourth highest in the ACT ($18,400), with WA in fifth place ($16,300) and SA in sixth ($15,400).