House prices to add another 20% if banks don’t slam the brakes
Chatter about the possible introduction of macro-prudential controls to slow house price growth is increasing, while rep...
First National Real Estate CEO Ray Ellis has joined the voices calling for a reform of state taxes, in particular stamp duty, saying it is excessive and placing too much restriction on housing activity.
“Australia has already proven to one of the most expensive property markets in the world and excessive property taxes, like stamp duty, is making it incredibly difficult for new entrants to gain access to the market or for existing home owners to upgrade,” Mr Ellis said today.
According to Mr Ellis, the situation with the Australian property market is becoming untenable and needs to be addressed at a national level.
“We have a chronic shortage of supply, worsening home affordability and an increasingly tight rental market, which could all be partially addressed with a more realistic approach to property taxes, such as stamp duty,” Mr Ellis said.
“In some cases, the one home and land package could be levied three times with stamp duty. I can’t think of another situation where the one item can be taxed three times.”
According to Mr Ellis, inefficient property taxes including stamp duty are now the biggest single non-income tax generator of cash for Australian governments. The Commonwealth needs to act to reduce the states’ dependence on these taxes, he said.
“Plus, as the Henry Review points out, transaction taxes such as stamp duties reduce economic efficiency, either by discouraging turnover or being embedded in the cost of production, which just increases the problem.”
Mr Ellis said he hoped the taxes would be addressed at the federal tax summit expected to be held around the middle of the year.