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Industry experts have thrown their support behind a new tax proposal that could lead to the abolishment of stamp duty taxes.
A NSW state-based review of federal financial relations found that the federal government should replace stamp duty with a more efficient and affordable broad-based land tax.
The tax, which is one of NSW’s largest raisers of funds, would initially be opt-in under a lengthy transition period, allowing buyers to pay stamp duty once or land tax annually.
The report noted that it could increase first home buying and help with housing affordability nationally.
REIWA president Damian Collins supports the Western Australian government having similar discussions about removing inefficient taxes such as stamp duty.
“Described in the report as an ‘unfair and damaging tax’, stamp duty is the wrong tax for rebuilding the state government’s capability to deliver for its citizens – clearly this also applies to WA,” Mr Collins noted.
In addition, the report notes that a broad-based land tax is the best instrument to ensure efficiency of state taxation.
“According to Deloitte, removal of stamp duty could lead to a 60 per cent uplift in transactions, generating an additional $1 billion to the WA economy, which is why a tax switch would establish the right settings for long-term growth,” Mr Collins said.
“By introducing a broad-based tax system, payments will be made over a longer period, allowing those who need to move the ability to do so. Having an opt-in model only on new transactions will mean that those who have paid stamp duty are not unduly hit by the replacement tax.”
The real estate body has urged for the removal of stamp duty in favour of a land-based tax system, as a way to help set up the state for a stronger long-term future.