More than ever as we emerge from the crisis we are going to have to get the most out of our economy.
Swapping stamp duty for land tax as the ACT government is doing (over 20 years) and the NSW government is planning (using an opt-in arrangement), is one of the best ways the tax system can help.
It says the “marginal excess burden” (damage) done by real estate stamp duty amounts to 70 cents for each dollar raised.
It discourages people and businesses from changing addresses as often as they should, meaning workers live further away from their work than they would and are reluctant to move to where there is better work.
- ^ ACT government (theconversation.com)
- ^ NSW government (www.treasury.nsw.gov.au)
- ^ tax discussion paper (treasury.gov.au)
- ^ Tax discussion paper, Australian Treasury March 2015 (treasury.gov.au)
- ^ just-published study (papers.ssrn.com)
- ^ Household, Income and Labour Dynamics in Australia (melbourneinstitute.unimelb.edu.au)
- ^ Axing stamp duty is a great idea, but NSW is going about it the wrong way (theconversation.com)
Authors: Lawrence Uren, Senior Lecturer in Economics, University of Melbourne