Share Coverage
Send to KindleCategory: Tax / Housing Industry / Housing
Land tax could replace stamp duty in proposal costed by PBO
Saturday, 18 Mar 2017 09:16:31 | Henry Belot
Stamp duty reform was discussed by state and territory leaders at the COAG meeting in late 2016. (AAP: Lukas Coch)
The Parliamentary Budget Office has costed a proposal to abolish stamp duty and replace it with a broad-based land tax, adding to a fierce political battle over housing affordability.
Key points:
- Under the proposal the cost of scrapping stamp duty would be offset by raising land taxes
- Victoria has abolished stamp duty for first-home buyers purchasing property under $600,000
- Queensland and West Australian governments are unlikely to support the proposals
Under the proposal put forward by the Greens, the Commonwealth would provide concessional loans to state and territory Governments to assist the transition.
The loans would hit the budget bottom line by $800 million, although states would rely on rising land tax revenue to repay the debt by 2030.
"States would also be required to cover the Commonwealth's borrowing costs for the proposal, with interest charged annually at a rate equal to the Commonwealth's cost of borrowing," the costings said.
The ABC understands the Queensland and West Australian governments are unlikely to support the proposals, given the significant revenue that stamp duty generates.
The Tasmanian Greens have previously proposed a similar idea, drawing criticism from the then state Labor government.
The proposal has been supported by the Grattan Institute's John Daley, who said it would be politically difficult to deliver but generally regarded as a good policy.
"If you reduce the stamp duty and do nothing else then the price of houses goes up; good news for existing owner," he told AM.
"Obviously if you then increase general property taxes the price of property comes down and that's bad news for existing home owners.
"If you do both at the same time it's a bit of a wash."
Mr Daley said the proposal would also give older Australians more freedom to downsize their homes.
"It deals with the situation of older people who are in a house that is maybe larger than they want," he said.
"They know that if they move from property one to property two then their net wealth will reduce because they will still have to pay the stamp duty."
Federal Treasurer Scott Morrison would not comment on the proposal, saying the Government would not be drawn on budget speculation.
His spokesman said various ideas had been flagged and the Treasurer would continue to work on housing affordability and land supply.
The Victorian Government recently announced plans to exempt first-home buyers from paying stamp duty on properties valued at less than $600,000.
Mr Morrison welcomed the proposal saying "good on them for having a shot", but questioned its overall impact on the housing market.
"On the issue of stamp duty, I welcome it but at the end of the day if that just means that people just bid up more at the auction because they can borrow more because they don't have to pay stamp duty, obviously, that will just take prices in one direction," he told Sydney radio station 2GB.
Stamp duty reform was discussed by state and territory leaders at the Council of Australian Governments meeting in late 2016.
In 2012 the ACT Government announced plans to phase out stamp duty on house sales by 2022 and to abolish insurance taxes over five years, replacing the revenue with higher rates.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
