The NSW premier Dominic Perrottet has signaled interest in abolishing stamp duty, calling it the ‘worst tax any state can have’ and a barrier to first home buyers entering the market.
The proposed reform would give home buyers in NSW the choice to pay stamp duty or an annual property tax based on land value and usage.
Once a property is moved to the new system it would remain subject to the yearly land tax, phasing out stamp duty over time.
“Our government is focused on one thing and that’s helping people get into the housing market,” Perrottet said on Monday.
“I believe stamp duty is the worst tax that any government can have.
“It is a massive impediment for people getting into the housing market.”
The premier stressed the policy had not been formally announced, and his government could not make changes to the one-off tax without approval from the federal government.
He said the state and federal governments should seize the opportunity for reform in response to the pandemic and the economic challenges posed by inflation.
“For way too long in this country, we have not had the reforms that we had under the Keating era and the Howard era,” he said. “They’ve all sat in the too-hard basket.”
Independent think tank Committee for Sydney welcomed the comments.
“Phasing-out stamp duty is the most important tax reform that the government of NSW could undertake,” Ehssan Veiszadeh said.
“The problems with stamp duty is that it’s a tax on moving home… it makes it harder for people to adjust where they live based on things like changing family size or getting a new job.”