First National Real Estate CEO, Ray Ellis, has joined the voices calling for a reform of state taxes, particularly inefficient ones like stamp duty, saying it is proving too taxing for working families to pay.
“Stamp duty has become nothing more than governments gouging money from those who can least afford to pay – working Australian families,” Mr Ellis said.
“Australia has already proven to one of the most expensive property markets in the world and excessive property taxes, like stamp duty, is making it incredibly difficult for new entrants to gain access to the market or for existing home owners to upgrade.”
According to two independent studies, the Demographia International Housing Affordability Survey 2011 and the Housing Industry Association’s most recent survey, residential property in Australia has become increasingly unaffordable.
According to Mr Ellis, the situation with the Australian property market is becoming untenable and needs to be addressed at a national level.
“We have a chronic shortage of supply, worsening home affordability and an increasingly tight rental market, which could all be partially addressed with a more realistic approach to property taxes, such as stamp duty,” Mr Ellis said.
“In some cases, the one home and land package, could be levied three times with stamp duty. I can’t think of another situation where the one item can be taxed three times.”
“The people who come off the worst in this situation are hard-working Australian families.”
Mr Ellis said that at a time when rents are soaring, vacancy rates are tight and there is a shortage of supply, there is a real potential that more Australian families will be forced onto the streets – increasing homeless rates and welfare payments and further adding economic stress to the Australian economy.
“Serious consideration needs to be given to addressing the problems with the Australian property market if there is going to be hope for future Australians to realise home ownership dreams,” Mr Ellis said.
“Plus, as the Henry Review points out, transaction taxes such as stamp duties reduce economic efficiency, either by discouraging turnover or being embedded in the cost of production, which just increases the problem.
“Inefficient property taxes including stamp duty are now the biggest single non-income tax generator of cash for Australian governments and the Commonwealth needs to act to reduce the states dependence on these taxes.
“An ideal opportunity presents itself at the federal tax summit which we expect to be held in the middle of this year – let’s just hope the governments don’t find the whole matter too taxing.”24 February, 2011