NSW, VIC to abolish stamp duty

Is Qld talking about introducing Land Tax on all properties?

 

Get rid of land tax and I might just be cashflow neutral on P&I. Pleeease!!!

 

To me, having to pay many thousands more per year in increased land taxes/rates definitely decreases the attractiveness of purchasing and ending up with a paid off ppor as it removes the security of knowing you have a very cheap place to live whatever happens. Knowing you could end up being kicked out of your paid off home because you have lost your income or can't afford to pay it in retirement. I do think they have a plan in the ACT for age pensioners to pay unpaid rates upon death or sale of the property but I don't know about anyone else who just finds themselves unable to pay over an extended period. So whilst perhaps this will make it easier for first home buyers having difficulty entering the market and easier for people who like the freedom to be able to move a lot, for others it might make long term renting and investing in other assets more attractive. If the retirees wanting to downsize today (but aren't due to stamp duty) have lived in their properties for decades then they would still have been far worse off over their lifetime if this scheme had existed when they purchased. If I recall you had to move every 7-8 years to break even under a scheme like this.

 

I can't see how the government could possibly introduce land tax on PPOR and expect everyone to simply pay an annual tax on top of the outrageously large stamp duty payment we have already made... A simple solution would be to offset yearly land tax against already paid SD, once you've offset the full SD then you start to pay. Otherwise it is clearly a double dip.

I remember reading a a year or two ago that there were some convoluted rules in ACT about this.
Is anyone aware of the ACT rules?

 

ACT are just introducing it over time, so land taxes/rates go up way more than normal each year (and stamp duty goes down somewhat) so you don't massively impact someone who paid stamp duty the day before the rules were introduced. Yes I don't see how they could really just introduce it overnight so it's not going to instantly plug some budget black hole they have due to decreased house sales.

Personally I will be incredibly surprised if they ever do abolish stamp duty entirely in the ACT. They will probably continue with this to a point where large numbers of people just can't pay these increased rates and land taxes every year (and they become a debt against the house unless they are going to kick them out) defeating the purpose of a stable income to govt and they can't continue with raising these charges any higher. If there comes a point where they decide they can't continue any further raising land taxes/rates then the stamp duty (which may seem low at the time) will be allowed to creep up over time again due to increases in house prices and then we end up with the worst of both worlds.

Also if you allow age pensioners etc to accrue the unaffordable charges as a debt against the property (possibly with interest) it becomes a disincentive to move also as that debt would be payable at that time.

 

I believe after all the madness has ended there will be a dire need for the nation to have a tax summit involving at least two levels of Government if not three. A complete redesign of the tax and welfare system is needed. All that stimulus spending has to be paid for. It will be trillions, not billions when the final wash up occurs. The present tax system wont repay this.

Some of the madeness includes how we send minerals and exports overseas and no taxes at all can be paid yet we import a playstation game on ebay and its taxed with GST.

One major isssue not addressed by media discussion of duty reform is how it acts as a limit to flipping and speculation which could drive prices higher.

The rate of GST, GST on food and stamp duty and a range of taxes all need review. Why not broaden GST to include exports so the trash that takes powdered milk off our shelves to profit overseas are subject to GST on the export value? CGT reform has to now be a target too as may some super concessions.

One reform sure to be run aggressively by Labour will be the failure of the job system. Contractors and other sham arrangements. And even the casualisation of what is largely full time or part time work so many missed benefits. Unpaid super etc.

 

Land tax pegged to CPI would be terrible long term, compared to one off stamp-duty

 

No argument there, but the chances of politicians being open to a 'everything is up for consideration' approach is all but nil. Rudd set up the Henry inquiry (virtually every recommendation passed over) on the understanding (IIRC) that it was not to include looking at GST; this government would be setting up such an inquiry on the basis that NG and dividend imputation were off the table. Ultimately though, the problem isn't them, it's us. We (to generalise) put our own interests ahead of sound policy, assisted by mass media who too often report these things in a partisan manner, and politicians - sadly driven by pollsters and spin doctors - know this.

Contrast with the last two months where partisanship has been abandoned, experts have been listened to and doing the best for society has been the aim on both sides of politics. Result: most politicians have gone up hugely in the public's estimation.

 

These greedy govts want to change from stamp duty to land tax just as their gravy train of stamp duty is running out..

If you have a choice between paying a gov once, or being their serf year on year.. best to choose the former..

 

The budget will need a fresh rethink. I would think noting is off the agenda but in due course. The states and Commonwealth will both need revenue. And there isnt more and recovery alone wont do it. The states rely on GST revenue. And need more. All parties will have to face this and all people too. Young & old, working and those not.

 

Removing stamp duty would increase prices. People can now afford to spend a bit more for property. Flipping is easier. Those that bought before with stamp duty will try not to sell.

 

The Bank having to account for yearly Land Tax would have an affect on borrowing amount.

I don't think the Government could Grandfather this, because then it won't fill the revenue hole.

 

In today's paper - A Sydney Morning Herald "Exclusive" (but not to Property Chat!)
Perrottet's recovery plan to axe 'inefficient' stamp duty, payroll taxes

NSW Treasurer Dominic Perrottet says revenue is expected to crash $9 billion.

"This is the biggest challenge facing our generation," Mr Perrottet said. "There is no place for pre-pandemic thinking in a post-pandemic world."

"There is no better time to rid the states of inefficient taxes that hold back economic growth and I am talking stamp duty and payroll taxes," Mr Perrottet said.

Sounds like property owners will be on tap for budget repair in NSW.

 

lol wont ever be successful, pollies dont get voted in for introducing taxes or taking away things like negative gearing.

 

I understand it has bipartisan support. Even the greens are on board.

Support for land tax becomes tri-partisan - AFR
The Greens have swung their support behind the push to replace stamp duty with a land tax, bolstering the emerging three-party support for reform of state revenues.

 

https://www.google.com/url?sa=t&sou...FjAJegQIARAB&usg=AOvVaw3kao4wjtrkVQ8ygoGvDsMh

Who thinks that Govco want to change this to save the majority money
Nope, it is all about making more revenue for the state (to spend/waste)
Particularly currently with sales and subsequently stamp duty revenue falling

 

Stamp duty reform on the horizon | Sky News Australia

Looks like they're proposing to grandfather those that have already paid and also a choice for those making future purchases.

 

Lol, not a reform at all then.

 

It's like everything else - moving to an ongoing 'subscription' model where you pay less up front but more over time.

 

Exactly, why pay for that burger upfront? When you can digest the cost over 4 delicious repayments