Stamp duty contributes about one quarter of annual state taxation revenue. Given the structural challenges of state and territory budgets, calls to abolish stamp duty without proposing viable replacement revenue sources are naïve. A considered proposal, which is gaining support, is to abolish stamp duty and replace the revenue it generates through an extension of the land taxation base. This would involve removing current exemptions from land tax, such as the exemption for the family home.
This paper will examine this proposal, including assessing the economic and social impact of such a reform, in order to determine whether abolishing stamp duty and extending land tax will deliver economic and social benefits to the majority of New South Wales residents.