 Stamp Duty: an inefficient tax?
Stamp duty may be abolished as calls for the tax to be scrapped gain momentum. Tax economists across Australia have stated that stamp duty just hinders the mobility of labour and leads to the poor use of housing stock.
The Mortgage and Finance Association of Australia would like to see stamp duty abolished and calls it 'inefficient'.
And Melbourne University professor John Freebairn made his feelings known at a recent conference conducted by the Henry tax review at the Melbourne Institute after he called the tax "a piece of garbage". THE MFAA is calling on Treasury secretary Ken Henry to recommend doing away with the tax in his taxation review due to be handed down by the end of the year. MFAA chief executive Phil Naylor says stamp duty is inefficient.
In most states, stamp duty taxes are reduced or waived for first home buyers purchasing a property in the low to middle end of the market.
However, most economists agree that stamp duty is among the most inefficient taxes and the reason is simple - it actually discourages people from trading with each other to achieve better outcomes for both parties.
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