State Government reviewing and aiming to eliminate stamp duty

What is happening in the property market this week?

The State Government is discussing a range of emergency plans and reforms which can be implemented to help get the economy back on track. One of the biggest discussion points at the moment is stamp duty.  

Many argue that the cost of stamp duty is horrendous. According to Domain figures stamp duty paid on a media-priced house increased by 183% between 2004 and 2019 in Melbourne. Some claim that the current stamp duty can make homes unaffordable and result in further barriers to get through for those first home buyers or those wanting to buy homes in the lower price brackets. In fact, Ken Morrison, chief executive of The Property Council of Australia claims that “There’s a consensus among economists and policy makers that stamp duty is the worst thing in Australia…it distorts behaviours, cripples job creation, lowers growth, and locks people into housing that might not be appropriate for their needs.”  

The State Government is currently looking at reforms and corrective action which can be taken to help soften the impact caused by Covid-19. One of the proposals is the suggestion of implementing a sliding scale for how the land tax will be calculated, with the amount to be determined by the value of the land.

One of the main considerations that needs to be taken into account in the current Covid-19 situation is timing. With the Reserve Bank predicting that the economy will drop approximately 10% in the first half of this year, and unemployment to rise, reducing the stamp duty could have a negative impact on the overall revenue if implemented at the wrong time because it is a substantial annual contribution to GDP- in fact between 2018-2019 the revenue generated alone for Victoria was $6 billion.

It will be interesting to see how this pans out and what changes are implemented.

It has always been my view that stamp duty is an unfair tax and a hindrance to home ownership. I welcome these proposed changes and will keep you updated on any announcements as they are made.

In the meantime stay safe and well.

Share this post

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email