Advanced Search

Share Coverage



Category: Tax / Housing Industry / Housing

PBO costs plan to abolish stamp duty in favour of land tax

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.

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 Government would be unlikely to support the proposal unless the Commonwealth provides compensation rather than loans.

The Tasmanian Greens have previously proposed a similar idea, drawing criticism from the state Labor Government.

'Home of dangerous ideas'


The housing affordability debate is increasingly becoming the home of wacky ideas ranging from dangerous to disastrous, writes Michael Janda.

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."

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.

5 housing affordability ideas


The pros and cons of some of the top suggestions to make buying a house more doable, along with the likelihood of them ever actually happening.

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.

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend