The Western Australian government is considering axing stamp duty in a nation-leading move to help make housing more affordable.
WA treasurer Mike Nahan is considering alternatives to what he calls one of the nation’s least efficient taxes, one which costs home buyers around $20,000 for a $545,000 home purchase.
The government will be looking for options for change during consultations for the Federal White Paper on tax reform.
“The Government recognises that stamp duty on property transactions is one of the least efficient taxes in the country and is keen to actively engage in the Commonwealth Government’s White Paper processes on national tax reform,” a spokesperson for Mr Nahan said.
Stamp duty has long been a significant source of revenue for state governments and they have subsequently been loathe to adjust it.
With the WA housing market returning lower than expected revenue last year however, stamp duty collections have been soft.
The WA Economic Regulation Authority is also behind sweeping reforms, saying it would like to see the State broaden its base and lower the rate of residential stamp duty and land tax.
While the WA Government has not investigated anything specific, Mr Nahas met recently with REIWA to discuss the proposal to abolish stamp duty and introduce a broad property tax.
REIWA president David Airey welcomed the moves when he spoke to The West Australian.
“A broad property tax review is long overdue and must be considered, given the introduction of GST should have led to the abolition of stamp duty and other State taxes,” he said.
Mr Airey said it was a promising sign of change and that stamp duty was too high for some potential property buyers which led to market stagnation.