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Friday, 29 November 2019

Sydney back in the line of duty

Stamp duty rebounds

Annual property transactions and transfer duty lodgements fell to the lowest level since 2013 in New South Wales in October 2019, to sit at well under 200,000. 

But the bottom will soon be in.

And indeed stamp and transfer duties are already rising again, thanks to the excessively high property taxes facing buyers these days. 

Stamp duty thresholds and rates are now too punitive, and this inhibits labour force mobility (increasingly so too does capital gains tax, since young buyers use investment properties as an early step on to the ladder). 

It's all unlikely to change any time soon, though, since - just as with pokies - state governments are addicted to the revenue.

Even still, I can't get behind the calls for a broad-based land tax. 

At least with stamp duties buyers can effectively aspire to owning a home, although there are always still rates to pay.

Land taxes, on the hand, can be something else again. 

As we've see in Brisbane City Council (and elsewhere), unimproved land valuations and therefore land taxes simply get jacked up at each and every available opportunity regardless of market conditions, with no realistic means of appeal. 

In effect, buying a property that attracts land tax becomes a liability over which owners have no control.