Stamp Duty Tax needs abolition
The Real Estate Institute of Queensland is scathing of the Queensland Government’s cash grab from the property sector from its stamp duty tax increases, saying an extra $273 million in revenues has been collected and it has reduced the affordability of housing across Queensland.
Australian Bureau of Statistics confirm for the financial year 2016 to 2017, the Annastacia Palaszczuk Labor government has increased its stamp duty tax cash grab from $3.005 billion in 2016 to $3.278 billion in 2017.
As the real estate industry’s advocate, REIQ CEO Antonia Mercorella said: “the State Government was taking too much from the property sector”.
The real estate industry peak body in Queensland reported that this increase means more than 25 percent of the total taxation revenue in Queensland is coming from stamp duty tax on conveyances. When land tax and other taxes on property are added to the equation, more than 38 percent of the total taxation revenue comes from property-related taxes or the equivalent to about $5 billion in FY2017.
Stamp duty tax on conveyances revenue contribution has increased from 17 percent in FY 2013 to 25 percent to June 30, 2017.
Stamp duty tax on conveyances is the second-largest contributor to the Queensland coffers behind payroll tax, which delivered a hefty $3.695 billion last financial year.
Ms. Mercorella stated, “We have good affordability in our residential market and great affordability in our commercial market, but rising stamp duty costs are threatening that affordability,” she said.
“In residential real estate, hefty stamp duty costs serve to stifle housing mobility. Upgraders and downsizers put off the next move because of the onerous stamp duty they will have to pay when they move,” Ms. Mercorella said.
“An upgrader moving from a $500,000 home to a $750,000 home would be forced to pay an estimated $20,000 in stamp duty, on top of the cost of their new home, along with various costs associated with buying and selling property,” she said.
“The reality is simply that stamp duty is threatening our affordability,” she said. “The REIQ has long advocated for the abolition of stamp duty. It does the property sector no favours and the State Government is now in danger of killing off the golden goose,” she said.
The industry advocate has reasonable cause and support for its concern among industry professions and housing consumers, as the Henry Tax Review found that stamp duty tax was an inefficient tax that led to housing problems.
The REIQ’s press release suggested the full abolition of stamp duty tax would serve to increase housing affordability for all Queenslanders and result in a dramatic boost to property transactions. It would also help unleash a flurry of economic activity that would have a positive kick-on effect not only in real estate but throughout the Queensland economy.
In its statement, the REIQ outlined the business case for the abolition of stamp duty tax which would;
- Allow new homeowners to put the subsequent savings towards paying off the cost of their new home;
- Make purchasing a home more affordable for the average Queenslander; and
Provide greater flexibility and choice for aspiring home-owners.
“It is nothing more than an inefficient and regressive tax that stymies economic activity in the real estate sector.”
The REIQ is calling for the system to be reformed and a modern property tax process to be introduced.
Stephen McNabb, CRBE Australian head of research commented in 2017 that Labor’s stamp duty or transfer taxes would bring Queensland in line with other states and that increased adversity in these markets didn’t occur too much.
Free Subscription Offer
How to stay up-to-date
Do you have an opinion about the stamp duty tax in Queensland? How does this issue impact you?
The TREN community wants to hear your story.
Become a subscriber to TREN eMagazine and be the first to receive local breaking stories, analysis and opinions on the Townsville real estate market.