Stamp Duty May Be Ending Soon
The Senate Economics References Committee’s affordable housing inquiry revealed the stamp duty on homes as being a “flawed” source of revenue. Liberal, Labor and Greens parliamentarians have come together to put an end to the stamp duty on homes. The committee has found that the taxation is inefficient as a form of tax income and that it hinders new home buyers by adding another cost to buying property and making homes less affordable. Housing choices have become distorted as a result of the tax and land use is also less efficient. This is affectively causing inflexibility in home buyes’ options which can reduce maneuverability of the labor force and hurt the overall economy.
Taking Away Stamp Duty
Removing the stamp duty without replacing the states’ revenue would be devastating though so a more efficient form of broader land taxes have been proposed. The new efficient forms of broad land taxes would have exemptions for owner-occupiers who might be asset rich but income poor and could be adversely affected by the change. Tax reforms are always difficult but are still necessary. The goal of the tax reforms will be to have a revenue neutral effect on state government while having a net positive impact on the housing economy by making housing more affordable.
Stamp duties provide revenue for the state and this is a state issue; but the federal government will have to step in and take action and set a standard by coordinating the reform. The federal government can place the tax reform under the umbrella of wider tax reform. The removal of the stamp duty will make it easier for new home buyers since it will be one less initial cost to have to consider when buying a home.
The Senate Economics References Committee’s affordable housing inquiry has called for the government to act and make it possible for young Australians to buy their first home. Purchasing a property in Australia should soon be a more level playing field and the initial cost for buying a home will be more reasonable. The burden of replacing the lost revenue to the state will be covered by all land owners through land taxes. This can be a real benefit to first time home buyers that want to have their own piece of the Australian dream and own a home. And the Australian government’s policies are doing everything possible to make that dream come true.