Proposal that stamp duty be replaced with yearly land tax in NSW.
http://www.domain.com.au/news/property-how-replacing-stamp-d…
As an existing home owner， would it be fair to pay annual tax? I paid nearly 30k stamp duty 8 months ago to purchase my first home and took me more than a year to save this money.
I think it is unfair to impose land tax on existing owner occupied properties. What is opinion of Ozbargain community?
Somehow, it's always a government conspiracy to shit on poor people. Did you not read the article? It was a report prepared by the 'NSW Business Chamber, the NSW Council of Social Services and the NSW Branch of the Australian Manufacturing Workers Union'.
Where does it say "NSW Branch of the Australian Manufacturing Workers Union" ?
The first link in the article, where it says "a new report", goes to this article, where you can find the quote.
@victorwilson:
It is an interesting list of bedfellows.
My assumption is that they want to get land tax in replacing stamp duty, then later make the case that other taxes be reduced with a rise in land tax. The Business Chamber's motivation is clear enough, I guess the Social Services see a potential reduction in GST or higher thresholds for income tax, and the AMWU are hoping for more business activity on the back of lower activity taxes.
The SMH article quotes
The NSW Business Chamber, the NSW Council of Social Services and the NSW Branch of the Australian Manufacturing Workers Union have combined to call for stamp duty on property purchases to be dumped and replaced by a newly designed land tax.
The report however, was prepared for NSW Business Chamber and NSW Council of Social Service.
(http://www.nswbusinesschamber.com.au/NSWBCWebsite/media/Poli…)
I read that this would only apply to new transactions, and existing owners who have paid stamp duty will be grandfathered.
I think that would work. Stimulate building/sales, spread the tax load out. But as long as it's the grandfather option, like the OP we paid our $30k just under 12 months ago, and paying more now would outright suck.
Agree. Don`t want to pay additional property tax to satisfy government greed.
You realise the government uses taxes to pay for the government services and infrastructure you use, right?
@mskeggs: I think that's what they are supposed to spend it on mskeggs. Unfortunately they seem to spend it on themselves and their mates.
@mskeggs: +1 for your comment - but in the past. now "users pay". exception could be places where politicians may have bought properties under their spouses name or back handed by developers.
It’s worth mentioning that as land prices increase and decrease, land tax also increases and decreases respectively. It would likely be a different picture entirely after 20 years for each scenario.
That's the sting in the tail right there. You would rather have a lump-sum stamp duty at today's rates as opposed to a variable land tax which will probably be indexed upwards every year or more frequently.
And let's be honest, property prices and land prices aren't decreasing. So forget that.
It might make entry into the property market easier, but it's a false economy. Over time you'll probably be paying more than what you would've paid had you stumped up the stamp duty upfront.
It's just a proposal by the NSW Business Chamber prepared by KPMG, the article is a what-if article, and the government hasn't said if they will do anything about it. So hold off on the pitchforks and torches for now.
I guess I will stand up for a land tax, as there seems to be this general comment that it is some how unfair or that taxes aren't something we should pay.
A land tax is levied on the people who own the land. By definition, these people have amassed enough wealth to pay for the land. That in itself makes them a better source for revenue than poor people (who need increased welfare to be able to pay GST, for example, causing increased churn).
Land tax is also quite inexpensive to collect. We already have a database of land valuation to use, and the process of issuing a bill is much easier than the admin required to collect GST, duty, income tax etc.
The biggest advantage, however, is the transparency.
If you are wealthy, you can structure your affairs so your off-shore company in Bermuda pays for your expenses, allowing you to have very low income in Australia, and pay little tax. It isn't possible to move your land to Bermuda, so it strongly ensures the tax is paid where the wealth is.
It is also hard to avoid. If you don't pay it, and try to bankrupt yourself after setting up trusts in your wife's name (ahem, Mr Tinkler…) the ATO can simply seize the real estate, just as councils do now if rates remain unpaid for a long period.
The details of how such a tax is implemented may be fair or unfair - e.g. if you paid stamp duty last year you would feel dirty if you had to start paying land tax this year. It is likely they will have a grace period or a ramp up so you only pay, e.g. half the land tax if you bought in the last 5 years, or similar.
The other proposal they make is to allow the tax to be deferred for those famous millionaire pensioners who have waterfront houses but subsist on the age pension. They will be able to defer paying the tax until they sell their residence (or pass away).
What the gov does with your taxes is up to you as voters. I am pleased to use or have available public transport, hospitals, law enforcement, education, defence, welfare, environmental programs, disability support, safety standards etc. These things require tax dollars to happen. Some things we want, like effective health care for an ageing population, better disability services and improved education, will place additional demands on our tax base. We need to decide to go without those improvements or accept that taxes will have to rise to fund them.
We should aim to have the most efficient tax system, that collects the taxes at the lowest cost, with the minimum of evasion, in the fairest way. The idea that people have set themselves up for maximum benefit under old, less-efficient rules should not stop us from introducing new, better approaches.
So even though I own a house I have lived in for 8 years, and would pay more as I won't get any concession for recent stamp duty, I support it because I think the total tax I pay will be less under a land tax, with fewer opportunities for rorts, than under alternative proposals to collect the same amount of dollars.
What mskeggs says is correct.
Stamp Duty is grossly unfair. It lumbers an unfair tax burden on the people who purchase real estate and not others. For many people the Fee (stamp duty) for buying a home is equal to or more than a years salary. And if you happen to find that you need to move again in a short period of time there's another years salary for the privilege.
I'm seriously not one for advocating any new taxes at all but a land tax makes infinite sense for many reasons.
If we were to remove stamp duty and replace it with land tax there would quite possibly be an extended introduction period as one is slowly removed and the other introduced. Unfortunately while there will always be some who will end up being partly worse off due to the timing of their purchases this in itself is not reason enough to not make the system fairer overall.
I paid nearly 30k stamp duty 8 months ago to purchase my first home and took me more than a year to save this money.
Land Tax would have made things easier for you, instead of having to find so much upfront.
What would be fair is to first deduct the land tax from the already paid stamp duty (consider it as a credit). When the credit reaches zero, then you start paying for the land tax.
It is government plan to make housing unaffordable so to create society gap between rich and poor for new generations, following the rest of the world.
My prediction is that new generations should and will stand up together to fight against this society injustice when the time comes,