Firstly, we hope you all enjoyed a great long weekend and an ease in restrictions – it was wonderful to see people out and about enjoying the sunshine and fresh air, whilst practising social distancing. Keep up the good work, and we may all come out of this on the other side, sooner rather than later.
In the midst of this COVID-19 crisis, some property commentators and key industry figures across Australia are calling on the government to abolish stamp duty tax, Australia’s ‘most unpopular tax’ according to the Property Council of Australia.
Leading commentators have labelled this tax as not only unpopular but inefficient and see it as a potential impediment to encouraging post-virus investment in property.
Stimulating turnover in the property market will be critical as Australia recovers from the pandemic, according to John Bongiorno, sales director at Marshall White – Stonnington.
“Stamp duty is just another deterrent that works against what the government is trying to do,” he said. “I think the government is trying to help the economy along and help solve unemployment but having taxes and deterrents on things just doesn’t work.”
“[Abolishing the stamp tax] would create jobs in construction and indirect jobs that assist construction, which in itself perpetuates income through income tax and other revenues like GST on top of a lot of the products that are sold as a result of stimulating construction.”
Head of Executive Research, at realestate.com.au, Cameron Kusher described the tax as “punitive” for those wanting to sell up and buy something that better suits their lifestyle.
“Stamp duty creates a greater incentive for homeowners to avoid moving,” he said. “That may mean they don’t move closer to work or they don’t take that job interstate.”
The axing of stamp duty is a top priority for the Property Council of Australia, according to its chief executive, Ken Morrison.
“If the abolition of stamp duty was a football club, the Property Council would be the number one ticket holder,” he said. “It’s Australia’s least efficient and most unpopular tax.”
“It discourages people from buying or selling housing, lowers labour mobility, restricts housing supply and is a highly volatile revenue source for state and territory governments. It does virtually everything an efficient tax shouldn’t do.”
Each state and territory have their own legislation around stamp duty; and clearly any abolition is not going to happen overnight, and the government would be looking to extract the revenue that stamp duty provides in some other way. There are many ideas, and it is certainly a robust discussion. We will keep you informed.