The Property Council has again called for the abolition of stamp duty amid heightened national debate about housing affordability.
According to the property Council of Australia, abolishing the tax could be funded by an increase in GST.
The tax has rarely been as unpopular as it is now, and it’s been steadily rising along with property prices.
Ken Morrison from the Property Council told the ABC says stamp duty increases are well above other rates of inflation.
“It’s simply just out of control. We’ve seen nearly 800 per cent increases in stamp duty on a family home over just over 20 years – that’s well out of kilter with CPI [the consumer price index] or anything that house price growth has done,” he said.
“Stamp duty, you’re paying an enormous slug of money at a time when you’re extremely stretched and, for most people, you’re putting it directly on your mortgage and paying interest on that stamp duty as well.”
Mr Morrison, who is the CEO of the Property Council, says the massive hole in the Government’s coffers created by abolishing stamp duty could be logically filled by increasing the rate of GST or broadening its base.
According to Mr Morrison that would be less harmful to the broader economy and first-home buyers.
“Treasury’s own modelling shows that for every extra dollar of stamp duty raised it has a 73 per cent impact on the Australian economy,” he said.
“So this is the worst of taxes. It’s a tax which is spiralling out of control; it’s a tax which harms affordability; and a tax which is also very bad for the economy.”
“Obviously it would need replacement revenue. State governments have got important work to do and they need revenue to do that work with. So we need a new deal to provide that revenue.”
“GST would seem to be the most logical source. It’s a well-accepted tax, it performs well and it has a much lower impact on the economy than these quite distortive stamp duties.”
Mr Morrison also added that GST would be a more reliable source of revenue for the Govenrment than volatile stamp duties.