While economists and industry experts are unanimous that stamp duty needs to be abolished, it remains unlikely until a solution is found for how to replace the $25 billion worth of revenue it raises nationally.
The Australian Property Council says stamp duty distorts behaviour, lowers turnover, locks people into inappropriate housing, dampens construction and reduces affordability.
The 2010 Henry Tax Review recommended using either an extension of the GST or a new broad-based land tax to replace it, but it is yet to change.
The New South Wales Budget does include some stamp duty reform measures and introduces an optional annual land tax rather than upfront stamp duty.
Victoria’s housing industry is backing the plan and would like to see it introduced in that state as well.
The move to a land tax would be permanently linked to the property which means future owners would have to pay land tax if that is what the previous owner had opted to do, so the tax is attached to the property not the owner.
Urban Development Institute of Victoria, chief executive Matthew Kandelaars says stamp duty is a “terrible, inefficient tax” and urged the government to seriously consider a similar overhaul.
