New South Wales has announced plans to phase out stamp duty and it’s getting support from both sides of politics, as well as the Reserve Bank governor.
Under the proposal, which swaps stamp duty for an annual land tax, the average Sydney home owner would be paying around $2400 a year.
The RBA governor Philip Lowe said the plan was major reform that people were calling for.
“We are seeing in a number of areas increased reform,” he said.
“A good example of this is the NSW government’s decision to consult on the switch of stamp duty to a general property tax.
“That’s the type of reform people have been calling out for for years. It’s been politically difficult.”
The federal shadow treasurer Jim Chalmers was one Labor MP willing to support the plan from the NSW treasurer Dominic Perrottet.
“Subject to the details, we have an open mind to changes of this nature which could make the tax system fairer and improve labour mobility and access to housing,” he told Australian Financial Review.
CoreLogic’s international chief executive Lisa Claes said getting rid of stamp duty would get things going regarding transaction activity but would take up to 20 years to achieve.
“The two greatest hurdles for buying property are getting the deposit and the other is stamp duty,” she told AFR.
“So from that perspective it will oil the wheels of activity.
“We think it will take about 20 years for the stamp duty to flush out of the system.”