Though there is growing support for abolishing stamp duty, how it is best implemented remains a matter for debate, according to Chief Executive of the Property Council of Australia, Ken Morrison.

Morrison has drawn attention to the fact that both the Australian Council on Social Service and the NSW Business Chamber support the abolition of stamp duty.

“Across the business and community spectrum we are seeing strong calls for stamp duty to be the first port of call for tax reform,” said Morrison. 

“Respected economic modelling has shown that scrapping stamp duty and replacing it with an efficient tax would provide a $3.3 billion boost to GDP. It would boost consumption by $9.7 billion and create 5,000 additional jobs," said Morrison.

“It would also remove a major inefficiency in housing markets, increase the turnover of housing from an average of 13 years to 8 years, and save tens of thousands of dollars for purchasers."

Though the abolition of stamp duty needed to be a tax reform priority, said Morrison, new research by Deloitte Access Economics commissioned by the Property Council of Australia suggests that a straight stamp duty for land tax swap would be politically unpalatable.

“There is no doubt that scrapping stamp duty would provide a major productivity boost to our economy, but we need a dose of political realism about how this can be achieved,” he said.

“While the purists like the idea of swapping one property tax with another, Deloitte found it would cost the typical household $2,360 a year, or about $45 a week. This is an average figure and many home owners in our cities would pay considerably more. A typical suburb in Sydney or Melbourne with ‘million dollar values’ would see householders pay $100 a week. This is not likely to be politically palatable,” said Morrison. 

“However, we should not forget that the typical householder in Sydney now pays $35,000 in stamp duty and $32,000 in Melbourne and these costs are put on to mortgage repayments," he said.

“ACOSS are right in arguing that the removal of stamp duty would need to be phased in and it could not be funded by a land tax alone. Given the substantial economic benefits of abolishing this tax, it makes sense for state and Federal governments to collaborate on how this could be done. Stamp duty might be a state tax, but it’s weighing down the national economy.”