Over the past two and a half decades, the cost of stamp duty in Australia has surged significantly relative to household income, nearly tripling in major cities like Sydney, Melbourne, and Brisbane.

In 2000, stamp duty on a median-priced house in Sydney was 44.5% of gross household disposable income, but by 2024, it had skyrocketed to 119.7%, with the typical household paying around $74,000 in stamp duty on a house valued at the median income of $61,837.

Similar trends are evident in Melbourne and Brisbane, where the stamp duty burden increased from 36.5% to 109.3% and from 19.5% to 66.3%, respectively, since 2000.

Experts suggest that transitioning from stamp duty to a broad-based land tax could ease these burdens, but such reforms face hurdles like potential revenue shortfalls and double taxation concerns for recent homebuyers.

The ACT has been gradually phasing out stamp duty over 20 years since 2012, replacing it with higher annual land taxes to distribute the tax burden more evenly and potentially improve housing mobility.

Research indicates that increased stamp duty can suppress housing transactions and reduce mobility, with Queensland's 2011 increase leading to a 7.2% decline in home purchases per percentage point rise in duty.

The rising stamp duty burden is viewed as a financial strain on buyers, which may lead to misallocation of housing, encouraging larger property purchases or discouraging homeowners from relocating for work.

This rapid rise is largely due to soaring median house prices and the bracket creep effect, as unchanged stamp duty thresholds until 2019 pushed more buyers into higher tax brackets over time.

Public and political perceptions of stamp duty vary, with some experts noting that replacing it with recurrent taxes like land rates could have different political and psychological impacts.