Productivity Commission Urges Stamp Duty Reform
The Productivity Commission has called for housing tax reform, concluding that stamp duties prevent mobility and efficient use of housing stock.
In its report – Shifting the Dial: 5 year productivity review – the Commission looked at factors and influences that may affect Australia’s economic performance over the medium term.
“Stamp duties are bad taxes – a bonanza in times of rising housing prices, but unfair and
inefficient,” the report states. “Stamp duties add over $50,000 to the cost of a median-priced home in Sydney, penalising people and businesses that move and discouraging others who want to move.
“For every dollar raised in stamp duties, the costs to Australia in reduced investment and mobility is 70 cents.”
The Commission’s findings have been widely welcomed, supporting calls that many have been making for years.
“Stamp duty is a monster tax which is trapping people in homes that are too big or small for their families and stage of life – the transaction costs of moving are so high,” Property Council of Australia Chief Executive Ken Morrison said. “The economic efficiency arguments for a stamp duty/land tax swap are well understood, but the problem is the mountains of stamp duty money that States are sitting on.
“What is needed now is the political will by state governments to make the shift.”