Swap CGT on PPOR for no stamp duty?

I read an interesting article in the Guardian about replacing stamp duty on your PPOR with CGT when sold.

Here's an idea that could earn the government £400bn in 25 years | Nils Pratley

There are arguments for and against, but I believe there must be some contribution from owners to society so for me the No SD and No CGT is not a valid response to my question. I also assume that those who have already paid SD on their PPOR would be exempt from CGT on its sale.

 

The problem is the states wont give up stamp duty now, to try to claw back uncertain cgt revenue from the feds. In the uk stamp duty is a national level levy.

this is impractical in oz without also putting in land tax for ppor. Or a state capital gains tax.

 

That view mentions UK pounds. The UK and NSW have both considered a similiar rule which could be adopted. In the Australian example the Commonwealth Govt would need to fund each state (COAG) for a long period for the cashflow impact of the foregone duty and there is insufficient liquidity available in this pandemic to do that. The mechanism for state funding is GST and this would need a rate / policy change. It seemed to have been put on the shelf for later consideration. There is also the broader issue of flipping etc which could benefit from such a policy and this could harm other buyers. It may have some merits for a first time property buyer but all schemes including existing duty concessions and first home incentives all must be considered not just the stamp duty element.

Australia also has more generous 50% CGT discount and absence exemptions which could allow a taxpayer to double dip benefits.

Its likely one of many measures for the table once this pandemic has passed. Tax reform will have to be addressed. In the UK for example there is also early discussion about a LIMITED CGT exemption for the home. It would discount the tax but not be exempt.

 

To swap would be a bad deal.

Sure you might save 30K in the beginning but then you might lose 100K when you sell.