Last year, he says, the ACT government announced a plan to transition out of stamp duty over 20 years, replacing it with a broad-based land tax levied via an increase in property rates.
“Reforming stamp duty was also a recommendation of the Henry Tax Review, which characterised stamp duty as an inefficient tax, and recommended replacing it with broad-based land taxes levied on all properties, which are more efficient. And in their recent pre-budget submission to the Australian Treasury, the Urban Development Institute of Australia (UDIA) called for an end to stamp duty over a five-year phase out period.”
Van Onselen argues that removing stamp duties has ‘a lot of merit’, describing them as a ‘highly inefficient’ tax that discourages housing turnover by unnecessarily penalising people who move to homes that better suit their needs.
“Obvious examples include baby boomers downsizing from large family homes and young growing families upsizing to bigger family-friendly homes. Such disincentives inevitably lead to an inefficient use of the housing stock, such as empty nesters occupying large homes with multiple spare bedrooms. Stamp duties also hinder labour mobility since they discourage workers from relocating closer to employment.”