Real Estate
10 May, 2023
Stamp duty must go in housing crisis solution
The Queensland government needs to replace stamp duty with a more equitable, reliable and affordable income stream, according to the Housing Industry Association.
HIA executive director for Queensland, Michael Roberts, said that one thing economists could agree on was that stamp duty is an inefficient, unfair and outdated tax, and he called on the Queensland Government to phase it out.
“While city parks are dotted with tents, a typical homebuyer in Queensland still pays an unjustified $12,715 in stamp duty on a median property worth $597,000. Stamp duty on the purchase of an $800,000 home is $21,850,” Mr Roberts said.
“Stamp duty is an inefficient, duplicative, inequitable and unreliable tax. If the state wants to deliver the services and infrastructure Queensland needs, then there are far better and fairer ways to finance it.
“Stamp duty impacts inequitably on first homebuyers, people moving for work, and those looking to downsize or scale up depending on changing household and family needs.
“It is a big hit on grandma when she sells the old family home and moves into a new accessible unit block – hopefully just down the street or closer to the grandkids.
“It is also a harsh extra cost for those who have no choice but to move out of a home, like a divorcing couple.
“The cost of collecting and administering stamp duty as estimated by Federal Treasury is 72 cents in the dollar. In comparison, GST costs 19 cents per dollar collected, and land tax collection and administration costs are almost zero.
“Stamp duty is also a very unreliable tax income stream. During the GFC, stamp duty revenues fell by more than a third. Just as governments needed a reliable income stream to stimulate the economy, they found their main tax measure failed to provide steady revenue and impacted state budgets.
“Stamp duty is punitive and creates a ‘tax on tax’ outcome where the whole cost of the home is considered, even where substantial taxes have been levied on land and other inputs already.
“While there is no silver bullet, inefficient taxation at the state level must form part of the suite of reforms, alongside increased land supply, planning reforms, promotion of diverse home styles in communities, and more general industry red- tape reduction as broad reforms required to deliver long-term solutions to the current housing crisis in Queensland.”
