Weekend reports suggest that an exchange of land tax for stamp duty might be, at last, under genuine government consideration. The potential significance of such a change – one we’ve previously backed – is hard to overstate. Cited in the Sydney Morning Herald, Grattan Institute economics guru John Daley describes it as ‘far and away the biggest [tax reform] prize on offer’.
It’s being put forward mainly as an aid to housing affordability through re-profiling home buyers’ property tax obligations. Instead of raising revenue by charging what some see as an upfront home ownership entry fee, governments would generate the same quantum of income by charging an annual levy based on property value. Existing homeowners whose property purchase had already incurred stamp duty would be given a credit against the new tax or an exemption for a period of time.