Policies > Stamp Duty

The current problem is that  every state and territory government has different and high rates of stamp duty tax on property purchases with different exemptions and confusing differences. We propose lower stamp duty tax on asset purchases that is consistent across the nation.

The key of this policy is that all properties purchased in Australia for less than $500 000 will only pay 1% stamp duty. In NSW this represents a saving of $12 990 to the purchaser.

The rate will increase to 5% for the value of all properties between $500 000 and $1 Million. After this it will rise to 8% on the value of a property over $1 million. Finally it will rise to 10% for properties valued over $10 million.

This policy will benefit 97% of Australians.

Below is a table of the tax savings to under our policy: The numbers are based on the NSW Stamp duty tax. The states and territories that currently have higher stamp duty tax are:VIC, WA, SA, NT and ACT. The savings below would be even greater they were compared instead of NSW. Tasmania and Queensland have lower stamp duty tax than NSW. 

 K = 1000    and  M = Million 

The Break-Even property price where there is no benefit or no loss of stamp duty revenue is $1 420 000.

Broader implications for the Australians:

 

1. Social impacts: Over 97% of Australians will pay less stamp duty on purchasing property. The richest 3% can afford to pay more.

This policy will help Australian families choose the home that suits them at their stage in life. This policy will not destroy neighbourhoods with families moving on every year. Rather, many families may move within their own street or suburb.

Many families will want to up-size their current home, and many older people will want to downsize within their current postcode. Some families will move interstate. But for whatever reasons people decide to move at least the government has done all it can to reduce the burden of selling and buying another property. 

2. Workforce Mobility Stamp duty on the price of the average Australian home will be reduced by up to thirteen thousand dollars depending on the state- this will increase the probability that people will relocate to find work in other parts of their city or country. The result of this policy will be to increase the mobility of the workforce and increase the supply of the labour market.

 

 3. The Economic Multiplier - This policy will stimulate economic activity in communities all across Australia.

 If more people decide to move then real estate agents will sell more properties and receive more commission and pay more income tax on their higher wages. This will lead to them and their families spending more on discretionary spending in the community for example at restaurants and shopping centres, thus indirectly employing more people in their local community and causing an economic multiplier as money flows quicker through the community.

The same goes with other occupations that will benefit e.g removalists, solicitors, conveyancers, bankers, mortgage brokers, builders, carpenters, plumbers, electricians etc. These people will all spend more of their higher incomes on other businesses thus increasing other people’s incomes in the local community. There will be many jobs created in these fields creating more competition and a better outcome for consumers.

 

4. Government Budget: This policy will have a neutral impact on overall the budget for the following reasons:

 Firstly the reduced revenue from stamp duty on properties valued less than $1.42 Million will be partly offset by increased stamp duties on more expensive homes.

Secondly there is a greater likelihood that more people will buy and sell property at a greater frequency. The average Australian family may move house once every five years rather than every ten. So this means twice as many transactions will increase stamp duty revenues over time.

Thirdly the increased revenue from income tax collections from a number of occupations (see Point 3) will offset any fall in stamp duty revenues.

Fourthly most people usually move home for a higher paying job and better working conditions and this will flow onto greater income tax revenue in to the government in Australia.

 

5. Investors: Approximately 95% of investment properties purchased in Australia are valued less than one million dollars, so most property investors will benefit from this policy. Property investors will be more inclined to buy a property when stamp duty is not a significant cost. Likewise many people will be keen to sell a poorly performing property and buy at another location if stamp duty is low. Many young people will likely have cheaper rents if more investment properties are built in Australia.

 

6. First Home buyers: These Australians will not pay any stamp duty on the purchase of their first home with a value of less than $600 000. If they decide to buy a second property for $500 000, they will only pay $5000 stamp duty.

 

 7. The Future: This gives Australians long term stable policy on housing. There will be no need for short term half price stamp duty offers on new dwelling until June etc. This policy gives a permanent cut in stamp duty on housing and other expensive assets. People can better budget for their future spending needs without wondering if the government will change its mind tomorrow.

 

8. Tax Collection: Each state will continue to collect the stamp duty through the established public service. The only difference is the money will flow onto the Treasury in Canberra rather than to the state governments since they won’t exist under our plan.

 

 9. Property Prices: This policy will lead to property prices continuing to grow steadily over time. With more new and old properties for sale the number of buyers will have greater choice to suit their needs. There is nothing in this policy that will significantly reduce or dramatically increase property values in the short term. The long term growth in property values should continue. There will be no speculative investment bubble as a result of this policy.

 

10. Other Housing issues: The No State Government Party has many other policies relating to housing in. Australia. 

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