Housing Minister Clare O’Neil makes big call on stamp duty

The federal housing minister is signalling a major change that could affect millions of property owners.

Federal Housing Minister Clare O’Neil says stamp duty on property purchases should be scrapped, calling it a “bad tax” that hampers movement in Australia’s undersupplied property market.

Stamp duty is calculated by state and territory authorities based on the purchase price of a property, and must be paid on top of the deposit and mortgage.

Axing the tax was a key recommendation put forward by the Business Council of Australia (BCA) in a report released this week.

Ms O’Neil said on Tuesday it was “a really good idea.”

“Stamp duty is a bad tax,” she told the ABC.

“It prevents people from moving around the housing market in the way that suits them best and it creates cost for everyone who is selling or buying a home.”

Federal Housing Minister Clare O’Neil says stamp duty on properties is a “bad tax”. Picture: NewsWire / Martin Ollman

The latest official figures showed state and territory governments yielded a whopping $35.2bn in stamp duty in 2021-22, making up just over a fifth of their total direct revenue.

Real Estate Institute of Queensland (REIQ) has welcomed Ms O’Neil’s comments.

Brisbane has one of the highest median house prices, with the latest CoreLogic report putting it just north of $881,000.

REIQ chief executive Antonia Mercorella said Ms O’Neil’s support to scrap stamp duty offered an opportunity for the federal and Queensland state governments to boost home ownership.

“Stamp duty presents a considerable barrier to those wanting to buy their first home, and to retirees seeking to downsize their family home,” Ms Mercorella said.

“It also hinders job mobility which affects the productivity of the entire economy, as well as impacting significant life decisions such as starting a family and moving homes.”

She said it could drive “rightsizing”, or making sure that people buy homes that match their size and location needs.

Instead of a stamp duty, Ms Mercorella called for a “phased transition to a land tax-based model starting with first home buyers, as well as abolishment of stamp duty for downsizers aged over 55 moving to a home with fewer bedrooms.”

Business Council of Australia chief executive Bran Black (left) says his peak body is supportive of many initiatives put forward by the Albanese government. Picture: NewsWire / Christian Gilles

Ms O’Neil also commented on the Coalition’s newly announced housing policy, which pledged $5bn to infrastructure to open up the stalled development of greenfield sites across the country.

The opposition says boosting infrastructure would lead to half a million new homes being built.

“We need to assist with greenfields development, as our government is doing,” Ms O’Neil said.

“We also need state governments to step up a bit on planning reform that will enable us to do infill in existing suburbs.”

She said many young people “would be very happy to live in apartments where they’ve got access to great resources, great transport networks and the life that comes from living in the inner city and we need to give people options.”

The BCA has also called for a harmonisation of processes at all levels of government to clear procedural bottlenecks and pump more newly built properties into the market.

The peak body said efforts should be spearheaded by the federal government, calling for a national reform fund that incentivises states to loosen regulation.

Originally published as Housing Minister Clare O’Neil makes big call on stamp duty