Currently, buyers with the most discretion - first homebuyers and property investors - are almost completely inactive and stamp duty has a lot to answer for. It is time to reform Australia's worst tax.
The constant lament from the real estate and building industries is that buyer demand, which would normally drive the construction of dwellings, is weak. No wonder when we slug buyers on average about 50 per cent of their average annual wage in stamp duty.
Our state governments know how unpopular these taxes are and that is why there is at least some relief for first homebuyers and investors. Whilst investors often borrow more to cover this tax, they will eventually claim it as a tax deduction when they sell. The more obvious benefit is the first homebuyer stamp duty concessions, but all this really just adds to the complexity of this dog's breakfast that are transaction costs around the purchase and sale of property.
If only we levied the stamp duty onto sellers and not the buyers. After all, it is those already in the market that can afford to offset their capital gain with a bit of stamp duty, not today's 20 something would-be homeowners.
I can foresee the hate mail from those with scarred memories of the Carr Government's vendor exit tax. Perhaps amnesty for all those owners that have bought property in the last ten years may be the sugar that helps the medicine go down. Some will see that this scheme would also work as a quasi-death duty, but that makes this reform to stamp duty no less workable or equitable in my view. Finally the tax should be pegged to consumer price index and not the value of houses.
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Stamp duty - always a hot topic. You can read the numerous comments here
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