The Real Estate Institute of Australia (REIA) has launched a new national and multi-year campaign to phase out stamp duty.

However, Angus Raine, Executive Chairman of Raine & Horne, believes the focus should first be on breaks for older homeowners. 

Start with breaks for empty nesters

Angus said his group’s view is that stamp duty is an inefficient tax that acts to slow the property market.

“As stamp duty is paid every time you move into a new property, it becomes more of an obstacle to households being able to move, believing the added cost of stamp duty on a purchase is a disincentive to buying a home.”

According to the real estate industry peak body, REIA, Australians coughed up an eyewatering $58.392 billion in property taxes between June 2020 and June 2021[i].

For the best part of a decade, Angus has been calling for stamp duty breaks for empty-nesters aged over 70 to increase the turnover of housing stock and improve housing affordability for families and first-home buyers.

“State and territory governments rely on property taxes for billions of dollars of revenue, and I suspect there will be plenty of pushback to axing stamp duty completely,” said Angus.

“Stamp duty-free real estate transactions for older Australians will help address some of the current supply constraints in our property markets and will ensure the state and territory governments aren’t left empty handed financially,” said Angus.

Great benefits from property tax reform

REIA President, Hayden Groves said that as Australia moves through the current economic and real estate cycle, there is no area of reform that will have greater benefits than the phase out of stamp duty.

“With cost-of-living pressures mounting, stamp duty remains a major hurdle to first home buyers, those wanting to move around the country or invest in much-needed rental supply. 

“In a time when housing supply presents such an immense challenge, the removal of stamp duty could increase sales and rental listings by up to 50% within existing housing stock.”

Stamp duty should have gone with GST

Hayden said that the removal of stamp duty, which was promised and not delivered with the introduction of a GST in 2000, would kickstart the economy, improve affordability and supply, and open opportunities for all Australians.

“There is almost universal agreement that stamp duty is an inefficient, unfair tax that stifles labour mobility and penalises those seeking to move to areas where better employment, educational or lifestyle opportunities exist.

“First home buyers seeking to buy established homes are forced to delay buying decisions to save for stamp duty.

“Stamp Duty adds about four per cent to the median house price of a home and adds on average $30,000 to the typical property purchased in Australia.

"Both directly and indirectly, stamp duty is contributing to property supply in Australia being critically low and impacting housing and rental affordability in every state and territory.”

Hayden added that stamp duty reform would require the will and collaboration of many across Australia’s Federation, and Axe the Tax aims to start a proper conversation on a national level.

[i] https://reia.com.au/stamp-duty/