Stamp duty

Under NSW proposal, buyers will reportedly be able to choose to pay an annual land tax instead of a lump sum on purchase.

There will be some older people living in properties who just won’t have the income to ever pay property taxes,” he said. In the same paper Perrottet argued it would allow more than 300,000 first homebuyers to enter the property market. On Monday he said any decision on stamp duty reform were “ultimately matters for the states”. At the time, it was flagged that homebuyers could choose to opt out of paying stamp duty in favour of an ongoing annual property tax. He said that while there would be “announcements in relation to housing affordability” in next week’s budget, any wholesale changes were still dependent on federal assistance. Here’s the opportunity right now.”

Economist Ken Henry famously derided stamp duty on housing transactions as a “diabolical tax”: clumsy, inequitable, antiquated and a drag on the economy.

For Andrews and Pallas, though, this is a gift: an opportunity to not only scrutinise and if necessary improve on the NSW model, but to learn from Perrottet which parts of his proposal might work here. At last, though, there may be a path forward, with revelations this week that NSW is planning a radical reform in its final pre-election budget that will allow some home buyers to “opt in” and pay an annual land tax instead of a one-off stamp duty levy. Australians are suspicious of tax reform, as former Labor leader Bill Shorten discovered to his peril at the 2019 election when his plans for negative gearing and franking credits were rejected by many who would be affected by them. Encouragingly, federal treasurer Jim Chalmers has already obliquely signalled co-operation could be forthcoming, saying “We’re prepared to lead a conversation on those sorts of things.” Only the ACT listened, embarking in 2012 on a 20-year transition to replace stamp duty with higher property rates. Indeed, in their seminal 2010 report into Australia’s tax system, Henry and his colleagues were unequivocal about stamp duty: it had to go.