IMPACT OF STAMP DUTY CUTS DEEP FOR BUYERS

Stamp duty was meant to be abolished by the states and territories when the goods and services tax (GST) was introduced in 2000.

But governments still cling to this bad tax, which forces people to pay tens, even hundreds of thousands of dollars just for the privilege of purchasing a property.

In 2010, the tax review conducted by then federal Treasury Secretary Dr Ken Henry found housing affordability could be improved by abolishing stamp duties. But governments around the country have done little to change anything in the 13 years since Henry recommended axing this tax.

The NSW Labor government has at least offered a reprieve from stamp duty for first home buyers, lifting the stamp dutyfree threshhold from $650,000 to $800,000, and introducing a concessional rate for homes between $800,000 and $1 million.

That ends the previous Coalition government’s flagship property tax legislation, where buyers had the option of paying an annual tax rather than stamp duty on properties worth up to $1.5 million.

NSW Premier Chris Minns (pictured) contended that while 13 per cent of first home buyers bought properties between $1 million and $1.5 million, they represented 52 per cent of the people who opted into the property tax scheme.

In Western Australia, the state government has unveiled stamp-duty rebates for off-theplan property buyers. Over the next two years, buyers entering a pre-construction contract will be eligible to apply for a stampduty discount of up to 75 per cent.

Victoria’s Labor government has announced in its state budget plans to abolish stamp duty for commercial and industrial properties and replace it with an annual property tax. So far, only South Australia has fully phased out stamp duty on commercial properties, although it never replaced it with a land tax.

Only in the nation’s capital is stamp duty facing extinction. The ACT government is well on the way to abolishing the tax as part of its broader property tax reforms, which will see stamp duty replaced with a broadbased land tax.