Abolish Stamp Duty

[pickle pickle]

http://theage.domain.com.au/real-es...sh-real-estate-stamp-duty-20110919-1ki28.html

There is debate about abolishing stamp duty. If stamp duty was abolished, wouldn't house prices just rise to the level of stamp duty and we'll be left paying a higher GST rate (assuming they increase the GST to abolish stamp duty) for no benifit for the buyers of property?

 

[tom32]

http://theage.domain.com.au/real-es...sh-real-estate-stamp-duty-20110919-1ki28.html

There is debate about abolishing stamp duty. If stamp duty was abolished, wouldn't house prices just rise to the level of stamp duty and we'll be left paying a higher GST rate (assuming they increase the GST to abolish stamp duty) for no benifit for the buyers of property?

GST is levied only on new homes on the improved land value and dwelling.

Stamp duty is on resales and the land component of a new home.

I would be all for them getting rid of stamp duty and GST from new homes. Homes are after all a necessity like milk and bread which are exempt from GST...

My issue with removing stamp duty only is to remove it is more benifitial to sale of existing homes than new ones, i.e. yet another thing developers are up against. At the moment they at least get an ever so slight edge in that there is less stamp duty on a 500k new home than an existing one.

 

[lizzie]

Stamp duty is state. GST is federal. Can't see the federals unpopular increasing of GST to appease the states.

Would be great if they did tho ... along with every other hidden tax. If there was no other tax in Australian existance, except maybe wages at 20% fixed and company at 10% fixed, I'd be happy to see GST at 20%

 

[Aaron_C]

I don't mind if GST increases - I claim it back anyway most of the time

 

[TomW]

If I recall correctly the Henry review wanted stamp duty to be replaced with a land tax.

 

[MarkB]

I know exactly when stamp duty will be abolished....

never ever (imho).

Yeah we all hate it, but it's money for jam for the states and territories.

Stamp duty is state. GST is federal.

The power to collect the GST is federal, but all the GST revenue is passed onto the states (every last dollar, that was a large part of the deal to get it through).

Changes to the GST require the agreement of 9 Governments (the Commonwealth, 6 States, 2 Territories). Not saying it can't be done, but it would not be a simple process.

 

[NedKelly]

Did they not tell us that Stamp Duty would be abolished when GST was introduced. Not when is was to be increased to 15%.

 

[MarkB]

No, it was never a part of the deal.

No, stamp duties on residential property purchases are here to stay (for the foreseeable future, at least) and there is no agreement, formal or otherwise, to review or abolish them.



Under the Intergovernmental Agreement on the Reform of Commomnwealth-State Financial Relations (IGA) that all states and territories were signatories to prior to the introduction of the GST, the following was agreed:

The Ministerial Council will by 2005 review the need for retention of stamp duty on non-residential conveyances; leases; mortgages, debentures, bonds and other loan securities; credit arrangements, installment purchase arrangements and rental arrangements; and on cheques, bills of exchange, promissory notes; and unquoted marketable securities.


Appendix A of the IGA then explains (in not much more detail) what they mean:

(i) Stamp Duty on Non-residential Conveyances

Stamp duty levied on the value of conveyances other than residential property conveyances.

....and....

(iv) Stamp Duty on Mortgages, Bonds, Debentures and Other Loan Securities

Stamp duty levied on the value of a secured loan property.



Mark