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Does stamp duty need to be replaced?

By Louise Morrin

Stamp duty is a charge that many buyers of property in Allawah will face, but is there anything that can be done to abolish it? According to the Property Council of Australia, replacing the charge with a land tax could have advantages for the economy as a whole.

The group commented on a report from the Australian Council on Social Service, which took a closer look at the economic implications of stamp duty. It established that some type of tax reform would be necessary and explored the different available options.

The extent of the stamp duty problem

Australian Bureau of Statistics (ABS) data from the 2012-13 financial year showed stamp duty led to a considerable rise in taxes on property. Compared to the previous year, property taxes were up eight per cent across the country, which was mainly a result of stamp duty charges.

New South Wales witnessed the greatest increase in dollar terms for property taxes, the ABS revealed, with the rise standing at 11 per cent.

Meanwhile, the Property Council revealed that the typical homeowner in Sydney pays around $35,000 in stamp duty. This is money that people could be putting towards paying off the mortgage on their property in Allawah.

Benefiting the national economy

Ken Morrison, chief executive of the Property Council, suggested there is plenty of evidence showing why stamp duty reforms is necessary.

"Respected economic modelling has shown that scrapping stamp duty and replacing it with an efficient tax would provide a $3.3 billion boost to GDP," said Mr Morrison.

"It would boost consumption by $9.7 billion and create 5,000 additional jobs."

Whether stamp duty is here to stay is yet to be seen, but for the time being at least, it's something you're likely to need to pay on your new home. Speak to the team at Ray White Carlton to find out how to decrease your liability.

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