Analysis: Stamp duty catch: what happens when it’s time to sell? | ElizabethRedman
First home buyers could get into the market sooner by avoiding stamp duty for a smaller annual land tax.
Stamp duty has long been disliked by economists as it is a tax on moving house. The NSW government had hoped to offer all buyers the choice between upfront stamp duty or a smaller annual land tax, making it easier for home owners to upgrade to a bigger home, downsize to a smaller one, or move closer to a new job.Flavio Brancaleone
“The big economic costs of stamp duty are about whether you go and buy again and move again. That’s the point at which people’s housing choices are constrained because they don’t want to pay stamp duty on the second property.” Domain figures show buyers who plan to move again in the medium term would save money by choosing land tax over stamp duty.Someone who bought a $1 million home could pay land tax for 16 years before equalling the amount they would have spent on stamp duty. A buyer at $1.5 million would take 18 years.“It is definitely a more watered-down version,” he said. “By limiting it to the first home buyer group in particular, it makes it a much weaker policy overall.
Independent economist Saul Eslake said the impact of the stamp duty change would be small as so many first home buyers would be purchasing under the $800,000 threshold, which offers a stamp duty concession or exemption.