The city where stamp duty is on the rise, and it’s been revealed that Brisbane home buyers are being faced with the largest jump in taxes of any city in the last 15 years.
However, the highest dollar value stamp duty bill for an average home award, goes to Sydney but the NSW Government is pushing ahead with plans to scrap the payment in favour of a broad-based land tax.
Economists do agree that the large upfront stamp duty bills do discourage homeowners from moving house for a new job or downsizing due to an empty nest, but this tax reform does pose many political challenges.
Domains Senior Research Analyst, Dr Nicole Powell noted that in Sydney for example, many homes would need to be owned for at least 15years under a land-tax system before the owner could match the upfront stamp duty cost.
“The current property transaction can prohibit people from moving homes to suit their life with the belief the belief that they need to stay in a property for a certain period of time to ‘claw back’ the cost of stamp duty.”
Dr Powell has written a submission to the government in favour of a land tax.
The NSW Government hopes to give buyers the choice between paying stamp duty upfront or paying an annual land tax. Once the property has been converted to a land-tax system, all future owners of it would have to pay land tax instead of stamp duty, which as an opinionated “hidden cost” can be truly beneficial for any buyers in the future.
The Government has since released a progress report showing growing public support for the change especially from first home buyers, though many retirees questioned the benefit for them. This can see home ownership increase by 6% and first home buyers able to save for a deposit even sooner.
We’ll keep you posted on the progress.
