States reject Claire O’Neil’s overtures to scrap ‘bad’ stamp duties
Housing Minister Clare O’Neil’s push for state and territories to axe stamp duty have been rejected, with governments instead opting to tinker with the levy to create a de-facto first home buyers grant.
Housing Minister Clare O’Neil’s push for state and territories to axe stamp duty have been rejected, with governments opting to tinker with the levy to create a de-facto first-home buyers grant.
On Tuesday, Ms O’Neil backed the Business Council of Australia’s call for stamp duty to be abolished and replaced with an annual land tax, arguing that the levy on property sales imposed by states and territories was a “bad tax”.
“It prevents people from moving around the housing market in the way that suits them best and it creates costs for everyone who’s selling or buying a home,” she told ABC radio.
“The moves that some states and territories have made to wind it back or to remove it altogether are really positive and I’m really supportive of it.”
The push appeared friendless among the states, which are collectively projected to raise $134bn in stamp duty this financial year, with jurisdictions also opposed to levelling a land tax in lieu of forgone revenue.
LNP leader David Crisafulli, who is widely tipped to win the Queensland state election on Saturday, ruled out scrapping stamp duty entirely, instead exempting first-home buyers.
“Our plan is to remove stamp duty for first-home owners to give them hope … I want young people to be able to own their own home,” he said. The LNP has pledged to abolish stamp duty for first-home buyers purchasing a new home.
Queensland Treasurer Cameron Dick pledged to never impose a land tax on the family home. “Minister O’Neil needs to understand I have to pay for schools, hospitals, police stations and detention centres,” he said.
“I’ve got to pay for all the services state government delivers but I’ll give you this guarantee, we will not put land tax on family homes.”
This year, the Miles government increased stamp duty exemptions for first-home buyers to apply to homes worth up to $700,000, with a concessional rate for those valued to $800,000.
Economists and tax experts overwhelmingly agree duties on property conveyances are an inefficient and distortionary means of raising revenue. Land taxes are generally considered fairer because they apply to all landowners, not just those who purchase property.
A Victorian government spokesman did not detail support for axing stamp duty outright, instead pointing to its plan to reduce the levy on off-the-plan apartments, units and townhouses for all buyers.
A NSW government spokesman did not directly respond to questions regarding Ms O’Neil’s comments, pointing to its policy to reduce stamp duty for first-home buyers.
Branding the policy a “forever tax”, the Minns government reversed Coalition-era laws that offered home buyers the choice of paying stamp duty or an annual property tax, waiving stamp duty paid by first-home buyers on properties worth up to $800,000.
Rather than dump stamp duty, South Australian Treasurer Stephen Mulligan pressed for federal Labor’s build-to-rent and help-to-buy legislation to be passed. “The housing supply shortage is a nationwide problem and that’s why the Greens need to stop playing politics with housing bills in the Senate designed to add housing supply,” he said.
A West Australian government spokesman said “stamp duty is an important source of revenue for states and territories to fund essential services such as hospitals and schools”.
In Tasmania, where a range of stamp duty exemptions and concessions exist, the Liberal government has no plans to dump the levy, even as it recognised the imposition it placed on those purchasing property. “Stamp duty is a major financial barrier to many Tasmanians trying to buy a home, particularly first-home buyers,” a spokesman said.
The Australian Capital Territory is the only jurisdiction to have slowly reduced stamp duty while at the same time increasing land taxes, but receipts for the former have continued to climb.
Opposition housing spokesman Michael Sukkar backed the push to dump stamp duty, which he labelled as “highly inefficient” but questioned Labor’s motivation. “Abolishing stamp duty is a positive,” he said, “but as we have seen in the ACT, Labor governments just use it as an excuse to tax people more.”
Additional reporting: Mackenzie Scott
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