Stamp Duty – Unfair and Inefficient Tax, Needs Replacement
Property industry considers stamp duty as an unfair and inefficient tax and introduces two ways by which it can be replaced by the state and federal governments i.e. by raising the GST or introducing a broad-based land tax.
“The federal government’s tax discussion paper confirmed stamp duty was one of the worst, most growth-inhibiting taxes and called for government leadership on reform”, said Property Council of Australia chief executive Ken Morrison.
ACT Chief Minister and Treasurer Andrew Barr said, “The territory was the only jurisdiction which had begun moving away from duty on property purchases”.
He further added, “Stamp duty is an unfair and inefficient tax. It distorts investment decisions, and makes the cost of buying a home more expensive“.
ACT is the only jurisdiction willing to tackle the change, as seen in the discussion paper. Also Mr Barr said, “He would encourage other state and territory treasurers to consider introducing a similar land-tax regime.”
Phasing out stamp duty will take two decades but Mr Barr said the ACT would have a fairer system in place long-term, and would also remove distortions on investment and spending.
The Urban Development Institute of Australia’s national president Cameron Shepherd said, “The total tax burden on a new home could make up as much as 44 per cent of its total cost.”
He further added, “Revenue from stamp duty is also dependent on the level of property transactions, making it a highly unreliable source of revenue for state governments“.