New South Wales politicians have reached a “newfound political unity” over the need to approach stamp duty reform with an open mind in the face of the COVID-19 pandemic.
“Every report on tax reform published in the last two decades has called for the abolition of Stamp Duty,” said Urban Taskforce CEO Tom Forrest.
“Stamp duty is highly inefficient as it changes people’s behaviour by providing an incentive not to downsize, and it punishes those least able to afford to pay – first home buyers.”
In fact, Australian taxes and regulatory costs have been shown to make mortgages for home buyers “60% to 100% more expensive” than they’d be otherwise, according to research from the Housing Industry Association (HIA).
According to Forrest, replacing Stamp Duty with a broad-based land tax has been considered by policymakers for years, but any real change has been kept at bay by scare campaigns.
“What is needed now is a common-sense approach, and it appears that we might just have that,” said Forrest, who went on to highlight that NSW policymakers might have something to learn by looking at South Australia.
“The South Australian Government has got the approach right. They started with abolishing Stamp Duty on commercial property, thus attracting investment and creating jobs,” he explained.
“This is the sort of thinking that is needed here in NSW.”
Forrest applauded NSW Treasurer Dominic Perrottet for his “brave move” of leading the charge for tax reform in NSW.
“If politicians across the spectrum can hold their nerve and resist the temptation to play politics, this much needed reform to the tax system could be a long-lasting positive legacy of COVID-19,” Forrest concluded.