In its pre-budget submission, REIA has urged the Government to abolish conveyance stamp duties and replace them withan efficient source of revenue for states and territories.
The Henry Review identified stamp duties as a highly inefficient tax. Stamp duties are a State tax and so are not determined by the Federal Government and the ACT State Government has embarked on a long term transitioning program of reducing stamp duties with higher rates.
It would be better for all state and territories to act in coordinated manner with leadership shown by the Federal Government.
Stamp duties represent additional costs to property transactions, thereby discouraging turnover of housing and distorting choices between renting and buying, down-sizing and between moving house and renovating. These distortions lead to a sub-optimal outcomes, reduce investment in the property market and impede labour mobility.