Big news this month is the announcement by the NSW treasurer, Dominic Perrottet, of the gradual phasing out of stamp duty. Overall, the big media outlets seem in favour of this change though their enthusiasm seems to vary on the details.
For example, SMH economist Jessica Irvine is in no doubt this is one of the big visionary changes in tax reform, and references reviews stating such. The Allhomes Domain subsidiary (itself a subsidiary of SMH) is a little more circumspect and discusses some of the nuances, especially relating to how this might affect NSW-ACT migration (since the ACT is already deep in the process of this very same long term change). Ultimately, the bottom line is the Allhomes article suggests that this change may place an small upward pressure on entry level house prices – especially those favoured by first home buyers – as there will be one less barrier to entering the market, and this will see more people competing for the available homes. There is some sense that this logic seems somehow counter intuitive since stamp duty for first home buyers has already been scrapped in NSW for properties under $650k anyway.
Core Logic seems to agree however that “replacing stamp duty with a land tax may not reduce the cost of housing, or increase affordability” since the asking price is generally a result of “what people are willing to pay”.
Other definite plusses would be the removal of a major barrier to selling. This is something that SMH and Core Logic definitely seem to agree on. As the SMH article says, “We’re about to get more mobile”.