State governments too dependent on stamp duty revenues, says report

Contact

Jul 5, 2019

State governments too dependent on stamp duty revenues, says report

Victoria has the highest dependency on stamp duty revenues closely followed by New South Wales, according to the latest Housing Industry Association Stamp Duty Watch report.

Luxury List

New research shows Victoria has the highest dependency on stamp duty. Pictured is the view from 143/350 St Kilda Road.

The recent House Industry Association's (HIA) Stamp Duty Watch report, released yesterday, highlighted that Victoria has the highest dependency on stamp duty revenues closely followed by New South Wales.

The ACT, which is seven years into a 20-year tax reform program to replace stamp duty, has the lowest dependence on stamp duty, making up only 13 per cent of total taxation revenue.

“In NSW the downturn in the property market is forecast to cost $10.6 billion in lost revenue over the forward estimates," said HIA Chief Economist, Tim Reardon. "In Victoria where the decline in house prices has been more modest, revenue from stamp duty has been revised down by $5.2 billion."

At a glance:

Victoria has the highest dependency on stamp duty revenues closely followed by New South Wales, according to the latest House Industry Association Stamp Duty Watch report.
The ACT, which is seven years into a 20-year tax reform program to replace stamp duty, has the lowest dependence on stamp duty, making up only 13 per cent of total taxation revenue.
HIA Chief Economist, Tim Reardon has suggested that alternative broad-based tax measures could deliver a more consistent and reliable revenue stream for state governments.

Mr Reardon explained that replacing stamp duty with a more predictable and equitable tax would provide state governments with a more reliable source of revenue.

“State governments have become increasingly dependent on stamp duty revenues. Stamp duty is an unreliable source of revenue and the increased dependence makes states heavily susceptible to housing market downturns. This sharp drop in revenues highlights the vulnerability of state budgets," he said.