Ask most property buyers, investors or owner-occupiers, what annoys them most when it comes time to purchase a property and the answer is usually unanimous – stamp duty.
It’s that extra add-on which can push up transaction costs by tens of thousands of dollars depending on the purchase price.
There have been calls for many years to eliminate stamp duty and now a report by the Federal Government’s affordable housing arm has joined the chorus of those who believe it should be replaced with a more equitable system.
The report by the National Housing Finance and Investment Corporation shows the vast majority of Australian home-buyers would benefit financially from a move to an annual land tax instead.
Scrapping stamp duty would significantly reduce the costs people faced when they wanted to downsize or upsize and those who moved frequently would benefit the most.
Stamp duty is already being phased out in the ACT and the New South Wales Government is planning to phase out the one-off large stamp duty in favour of a smaller but annual land tax.
The NSW proposal won’t affect current owners, and those who acquire properties under the new regime will have the option of paying upfront stamp duty or instead an annual land tax.