Stamp Duty Land Tax Puns

I thought this was supposed to be something that was being proposed/discussed and potentially rolled out (at least in NSW)?

Haven't heard a peep about it in months, yet it seems like a massive way to help with liquidity in the housing market. Googling likewise returns no recent results... seems it's conveniently been swept under the rug? 🤔

I thought I’d do a post about the changes to stamp duty in nsw that is likely to become law from about July this year. Link here ( https://www.treasury.nsw.gov.au/sites/default/files/2020-11/NSW%20Treasury%20property%20tax%20proposal%20Consultation%20Paper.pdf )

It’s currently going through a government consultation stage which will be released on March 14 then will go through parliament (Labor looks likely to support it)

I’m far from being a Liberal government supporter but this is actually great policy especially for first home buyers, I’ll go through a few reasons here

1- first home buyers will get up to a $25,000 grant to go towards a deposit or renovations

2- A big part of house prices is supply and demand. Many people don’t move or downsize because of the upfront cost of paying real estates (20-40k) plus stamp duty (30-60k) with this change stamp duty won’t be a problem plus (I hope) real estate fees will come down with more buying and selling as people move to different cities working from home or different jobs or downsizing

3- if there’s more supply on the market with more people buying and selling you’re more likely to get a property you like with more options

4- land tax fees will be far cheaper for owner occupiers (0.3% of land value plus $500) where investors will pay 1% so we finally have a leg up against investors who can use negative gearing to outbid first home buyers

5- it’s a far better tax as governments can estimate how much they will get each year and how much they can spend on services fir the State where currently in bad years where nobody is selling they don’t get many stamp duty transactions

6- people can buy and sell many times without being lumped with a big 40k stamp duty fee each time

7- the land tax will work out to be about 20 years before it breaks even with the stamp duty fee of which you’d most likely be borrowing anyway to pay for at 2.5% interest

8- Finally we might see people not wanting property prices to go up as then their land tax will go up so the government can actually pass policies to have affordable housing without being slammed in the press

9- other state governments will follow suit

What do you guys think?

Wondering how States will raise extra revenue for their massive amounts of spending currently going on?

In the end, NSW will be getting greater tax revenue, basically taking more of our hard earned from us.

From an ABC article.

"In a good year, NSW earns around $9 billion from stamp duty.

Mr Perrottet's plan involves giving that away in favour of an annual, but much smaller, revenue stream which will be good for state finances down the track. But the initial period will see state revenue nosedive.

The trade-off is that, according to Mr Perrottet, the more efficient tax system will inject $11 billion into the economy over the next four years."

I am no economics or taxation expert, are there any examples of this change being performed in other countries? Maybe someone experienced can explain?

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