The South Australian Government has taken the radical decision to phase out stamp duty on transfers of commercial real estate over a three-year period, commencing 1 July 2016. Stamp duty rates for commercial property will be reduced by one-third from 1 July 2016 and by a further one-third from 1 July 2017, before the duty is abolished on 1 July 2018. I was surprised by the government’s move, which was announced in last week’s 2015/16 Budget. Most of the lobbying for the abolition of stamp duties has centred on residential property and no one saw it coming for commercial real estate. At the same time, all stamp duties were meant to be abolished 15 years ago when the GST was introduced. Any impost on property transactions that can be removed is welcome in South Australia by 2018. However, I’m confused by the government’s decision to phase out the removal of stamp duty over three years. We don't want to risk the danger of the phase-out creating a handbrake effect on commercial real estate transactions in the final quarters of the next two years. Commercial buyers may wait for the clock to tick into the new financial year to ensure they get the benefit of the lower tax rates. The majority of commercial real estate transactions in South Australia are less than $2 million. Therefore a decision to immediately abolish all stamp duty on transactions under $2 million would have been nice. Other state and territory governments will be watching the results of the SA Government’s stamp duty cuts. If this becomes an incentive to do business, then other governments around Australia will consider it. We just don’t want other governments coming in and making the cuts immediate, which will leave our three-year phase-out looking a little laborious.