“In the case for abolition of stamp duty, the end justifies the means,” says the industry body
The Housing Industry Association (HIA) has joined calls for stamp duty to be abolished.
Last year, New South Wales treasurer Dominic Perrottet said that stamp duty is “a relic from a bygone era” and called for feedback on a proposal that would give home buyers a choice to replace it with an annual property tax.
Several industry bodies – including the Real Estate Institute of NSW and the Real Estate Institute of Western Australia – have already issued their own statements urging governments to reform stamp duty collection.
Adding to the chorus, Tim Reardon, chief economist at HIA, said that in “the case for abolition of stamp duty, the end justifies the means” in a recent submission to NSW Treasury,
“In replacing stamp duty with a more stable, efficient and equitable tax we should remain focused on the benefits of the reform, not the complexity of the transition,” said Reardon. “There are numerous strategies that can be pursued to abolish stamp duty – including the phased in approach or an ‘opt in/out’ arrangement. [However], the case in favour of reforming stamp duty is so strong that it doesn’t matter which of these options is adopted, as long as stamp duty is abolished.”
According to Reardon, penalising households for pursuing home ownership “does not lead to good economic or social outcomes.”
“The efficiency benefits of the removal of stamp are extensive,” said Reardon. “A workforce able to relocate in the pursuit of education and employment opportunities, without incurring punitive taxes, supports a range of family and community goals. Households able to move to a home that suits the size of the family and the location of their employment and studies can lead to a more efficient allocation of public investment in transport infrastructure. It allows an ageing population to shift closer to family and medical support, leading to a more efficient allocation of land and health care resources.”