What if Stamp Duty was Abolished

Discussion in 'Property Market Economics' started by MTR, 19th Mar, 2017.

Join Australia's most dynamic and respected property investment community
Tags:
  1. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    what do you think would happen, a stampede of buyers?

    I wish ........Melb stamp duty fees highest in OZ, what a rort

    No stamp duty in NZ or USA.....Oz should do the same

    MTR
     
  2. big max

    big max Well-Known Member

    Joined:
    30th Nov, 2015
    Posts:
    2,091
    Location:
    Gold Coast
    Agree. I've done well in other markets such as HK and SG. Again no stamp duty. It pains me to pay it and it's a factor I look at when deciding to invest. It's a cost I factor into every investment I make (and despite that I concluded it's worth getting into the Gold Coast market). But generally capital gains tax (and to a lesser extent transaction costs like stamp duty and agents fees) are a real turn off to me.
     
    SOULFLY3, Beano, MTR and 1 other person like this.
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    Would be great for restructuring and debt recycling strategies.
     
    Handyandy likes this.
  4. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    From my reading, they are not getting rid of Stamp Duty. They are replacing it with a land-tax-like charge, payable on every property. No exemption, no threshold.
     
    Handyandy likes this.
  5. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,572
    Location:
    Sid en e - olympic city
    Yeah, that is what I hear.

    But pay attention (everyone who has not been round the block a few times).

    The govt *NEVER* do anything that will lose them cash flow, or in other words, they will find ways for it to cost you more. :)
     
    Stoffo, Biz, Observer and 5 others like this.
  6. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,932
    Location:
    Brisbane
    Where are you reading this?
     
  7. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    Secret budget papers :) :).
     
    Observer, Cactus and Barny like this.
  8. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,932
    Location:
    Brisbane
    Is this chatter more than the usual chatter though?
     
  9. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    Who knows. I am not excited nor worried.

    The new tax would only apply to new purchases and would apply every year.

    If you have already paid stamp duty, you won't pay the new tax.

    That is, if you are game/silly enough to believe them.
     
    wylie likes this.
  10. Ran Gus

    Ran Gus Well-Known Member

    Joined:
    5th Feb, 2016
    Posts:
    128
    Location:
    Australia
    kierank likes this.
  11. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    For investors, this will lower one's cost base and give us a new deductible expense.

    Some properties which would have been cashflow positive could now be negatively geared.

    Next thing they will want to get rid of negative gearing.
     
  12. teetotal

    teetotal Well-Known Member

    Joined:
    7th Nov, 2015
    Posts:
    736
    Location:
    Sydney
    I was thinking the same and TBH I'll be happy with that change. Better than paying a one-off duty its better to pay a small ongoing expense.
    It not only support FHBs but increases options for us investors too who can secure another property without worrying about paying a large sum out of their buffer.
     
    kierank likes this.
  13. Beelzebub

    Beelzebub Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    822
    Location:
    Lost
    The plan is to abolish stamp duty in favour of land tax. This wont be regressing. It will only apply to new purchases. In order to fund the revenue shortfall the states will take a loan from the government until there is enough historical sales to make up what they were getting in stamp duty.

    To me this looks like a real positive. The land tax is a small percentage, seems less than what you would pay in council rates.

    The problem however is what will inevitably flow. The states need more money and no one like property investors. 15 years down the track the land ax on non PPORs will prob be huge
     
    kierank likes this.
  14. ellejay

    ellejay Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,192
    Location:
    Kimberley and NZ
    I don't think I could have built my portfolio anywhere near as quickly as I have if I'd been paying stamp every time. It's an absolutely huge cost and I think I'd only be coughing it up if I was reasonably certain of a market being well on the up.
     
  15. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    Based on the land tax rate they are talking about, I would be happy if they refunded me the stamp duty I paid last year and let me pay the land tax.

    I bet that won't be an option.
     
    Biz, Observer and Angel like this.
  16. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    Stamp duty can also often be a killer for investors wanting to renovate and flip, very hard to make it work
     
    Observer, EN710, big max and 4 others like this.
  17. S.T

    S.T Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    638
    Location:
    Melbourne
    No stamp duty makes flipping a viable strategy again.
     
    EN710, big max, wylie and 2 others like this.
  18. Cactus

    Cactus Well-Known Member

    Joined:
    18th Jan, 2016
    Posts:
    1,445
    Location:
    Melbourne
    I hope this is the case... I would have thought the govt abolishes one tax and implements another. Stiff to those who end up paying both.

    But as I say I hope your right. It would make all my investments very hard to sell given the extremely low stamps (vacant land in outer suburbs) I have paid and not having to pay and ongoing levy. Need to get more before this is implemented.
     
    kierank likes this.
  19. bumskins

    bumskins Well-Known Member

    Joined:
    16th Aug, 2015
    Posts:
    528
    Location:
    Sydney
    Doesn't the US have other property taxes that are paid yearly? which is what is being proposed. e.g. Stamp Duty -> Land Tax.

    Not sure when you invested in those markets but I thought Singapore & Hong Kong both have Stamp Duty. Pretty sure they are 15% for foreigners too.


    In my opinion keep Stamp Duty for foreigners, get rid of it for locals. But both pay the new Land Tax. That way the Government can maintain their revenue, and it spreads the burden out over time.
     
    Last edited: 20th Mar, 2017
    wylie likes this.
  20. big max

    big max Well-Known Member

    Joined:
    30th Nov, 2015
    Posts:
    2,091
    Location:
    Gold Coast
    Sorry I mis-read. Yes hk and sg have stamp duty. It used to be very low by oz standards - now higher to stop speculation. But no capital gains tax (same as NZ) which is aweome.