Urgent Need To Do Away With Stamp Duty
The government-in-coming will do well to abolish stamp duty, says the Real Estate Institute of Australia (REIA). Stamp duty, levied as a traditional property tax, is not only inefficient but also decreases productivity of the nation.
Stamp duty puts pressure on cost of housing
Stamp duty is responsible for spiking the cost of housing and thus contributes to the housing pressure. At the moment, the tax burden constitutes nearly 30% of the entire output value of the housing industry. Abolishing stamp duty and similar taxes can bring down the cost of housing by roughly 10% according to REIA.
A parliamentary advisory committee
REIA feels that tax reforms cannot be ignored any further and there is need for a parliamentary advisory committee comprising of industry and welfare groups. I am all for the idea personally.
After all, abolition of undue taxes will only create favourable grounds for business expansion pan-Australia.
I have always been very vocal against any tax that impedes growth and burdens a certain sector/section of industry/society. Stamp duties have graver implications than what we assume they have.
I cannot quite comprehend how a developed nation like Australia can have such duties at 3.5% in some cases where the global standards are close to 1%.
Property taxes contribute heftily to the government exchequer
I know it’s mighty difficult for the government to let go of something that brings in more than a $billion to the treasury each year. This being said, government has to look at the bigger picture.
All of us can’t be Queenslanders
Queensland is an exception to Australia but not everyone can run to Queensland and buy properties there to avoid hefty stamp duties.
There is another way to avoid the duties: buy now and build on the property in another financial year.