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0 pointsbrc14y ago0 comments

Stamp duty or taxes are a horrible idea. I live in a stamp duty regime, and if I want to sell my house and buy another one, then I have to pay about $30,000 to the government. First home buyers are exempt, but after that, you're in.

The reason it is so high is that it was set a long time ago on a sliding scale, and bracket creep of house prices means that every house traded is on the old 'high' value.

As a result, housing liquidity is low and people sit on unsuitable houses for long periods of time because they can't afford to sell and buy another. This leads to excessive commuting as people drive long distances rather than move closer to jobs, and leads to old people staying in oversized houses, tying up housing stock.

With a median priced home, if you sell it, and buy another of identical value, you will have spent nearly $50,000 on agents fees, stamp duties and other costs.

I would dearly love someone to explain to me how that is a good idea, fair or any other justification.

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wiredfool14y ago

Sounds about like the US -- in King Co, WA anyway (a few years back), it cost about 9.1% to sell a house. There was 6% for the agents, and some handful of taxes and stuff for the other 3%. It's not that bad for the buyers though, as the seller pays most of the big stuff.

benmmurphy14y ago

just because the seller is writing the check doesn't mean they actually pay for it :) you could imagine a situation where taxes were dropped and instead of the sellers pocketing the extra money they are forced by competition to drop prices by the full amount of the tax saving.

brcOP14y ago

The true split of buyer/seller payment of the taxes depends on the type of market at the time. In a buyers market, the seller is going to pay all the taxes. In a sellers market, the buyer is going to pay all of them.

Either way, there is no justification for a tax on buying and selling things like houses and cars. Why you would want to disincentivise transactions between people I will never know.

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