Australia's housing crisis has many authors, but one of the least examined is a tax that sits quietly on every property transaction in the country. For older Australians who own their family home outright and would genuinely like to move on, stamp duty is functioning less as a revenue measure and more as a financial trap.
The numbers are confronting. According to 9News, stamp duty on Sydney's median home price of $1.75 million currently totals $78,262. In Melbourne, where the median sits at $1.083 million, buyers face a bill of $62,326. Pile on conveyancer fees, real estate agent commissions, and removal costs, and the total outlay for a retiree wanting to move into something more manageable can approach or exceed $100,000 before they have spent a cent on their new home.
The backdrop to all of this is a striking concentration of wealth. KPMG's January 2026 household wealth analysis found that Baby Boomer households remain the wealthiest overall, with an average net worth of $2.46 million, while Gen X households hold the most wealth in dwellings and land at an average of $1.445 million, compared to Baby Boomers' $1.36 million. Two generations are sitting on enormous property assets, yet the transaction costs of moving those assets along the chain are steep enough to make many stay put.
Michael Yardney, director of Metropole Property Strategists, told 9News the arithmetic simply does not work in favour of older sellers. "For downsizers, it means paying up to $100,000 in tax just to free up equity and move to a more suitable home," he 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."
The problem is compounded by what is not being built. Yardney has noted that the middle-ring suburbs of Australia's major cities, where most older homeowners have spent their lives, are short on medium-density housing. Retirees who want to stay close to their communities, doctors, and family networks find the options thin. Not enough suitable downsizing homes have been built around Australia, leaving many retirees stuck in their larger homes until something suitable and affordable comes onto the market.
The Reserve Bank of Australia has weighed in on the structural dimension of this problem. RBA Governor Michele Bullock has blamed state stamp duties for preventing older baby boomers from downsizing, calling it "a tax on mobility" and warning it is not only a barrier to downsizing but a barrier to people moving to find jobs.
There is a legitimate counter-argument here, and it deserves honest consideration. The case against targeted stamp duty relief for wealthier retirees rests on a fairness principle: these are households that have already accumulated substantial capital gains on property purchased at prices far lower than today's. Critics of such concessions argue the government should focus on helping those struggling to enter the housing market rather than those who have already enjoyed considerable capital gains, with one former South Australian treasurer suggesting that a homeowner whose property has risen by $400,000 should not require government incentives to move. It is a point that deserves weight, and the risk of using public revenue to subsidise the movement of already-wealthy households is real.
Yet the counter-argument has limits. Through stamp duty, governments tax movements heavily and ownership lightly. That is a sound model if the aim is to keep people stationary, but a poor one for a housing market that urgently needs greater turnover and supply. A report from the Retirement Living Council has suggested that removing financial barriers like stamp duty could allow an extra 94,000 seniors to move into retirement village housing options. The supply effects, in other words, are not trivial.
Some state governments are beginning to act. South Australia's incumbent Labor government, just weeks out from a state election, committed to scrapping stamp duty on new homes for people aged 60 and over, at a projected cost of $70 million, applying to those who sell their primary residence and purchase a new or off-the-plan property worth less than $2 million. In Western Australia, REIWA's 2025 Housing Issues Survey found 63 per cent of retirees said stamp duty costs stopped them from being able to downsize.
The broader policy picture points toward targeted reform rather than wholesale abolition. A means-tested or age-based stamp duty concession for a final-home purchase is a more defensible proposition than a blanket cut. It directs relief to those whose inaction is most costly to the overall market, avoids subsidising speculative transactions, and can be designed to apply only to downsizing rather than lateral moves. Yardney argues such a measure "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."
The tension here is genuine. Reasonable people can disagree about whether the state should ease the exit costs of asset-rich households. But the housing supply problem is real, the stamp duty barrier is demonstrably contributing to it, and the cost of doing nothing is borne disproportionately by younger Australians who cannot get into the market at all. That is a trade-off state governments can no longer afford to leave unaddressed. As the RBA's Bullock put it plainly: "Stamp duty is a tax on mobility." At some point, the mobility of the whole market has to matter more than the revenue from a single transaction.