Experts overwhelmingly support axing stamp duty nationally:

Experts overwhelmingly support axing stamp duty nationally:
Staff reporterDecember 7, 2020

An annual land tax should replace the one-off financial sledgehammer of stamp duty on property purchases, the experts in this month's Finder RBA Cash Rate Survey™ said.

Of the 27 experts and economists that weighed in on stamp duty 9 in 10 experts (89%, 24/27) were in favour of the proposed stamp duty scrapping.

Earlier in November, the state government announced that NSW will lead the way on tax reform with its plan to make stamp duty optional, granting homeowners the ability to pay an annual land tax instead.

Graham Cooke, insights manager at Finder, said that stamp duty can be a dealbreaker for those looking to relocate, and this can impact property demand and supply.

“Buying a home in Australia is already an expensive affair and stamp duty makes it more so."

“It effectively raises the bottom rung of the housing ladder, burdens buyers with a huge up-front tax and inhibits the flow of property sales."

“In an ideal market, you buy when you can afford to and you sell when you want to. Stamp duty forces first-time buyers to save up for longer, and prevents current owners from upselling," Cooke stated.

Cooke said removing stamp duty may result in a short-term boost to property prices.

“Axing the tax now also means buyers who are currently saving can get more bang for their buck,” Cooke said.

All experts surveyed (40/40) are predicting the cash rate to hold this month.

Low rates are expected to stick around for a while, with 20% (8/40) of experts expecting the cash rate to increase within the next 2 years, and the earliest predicted rise occurring in Q3 2021.

According to John Rolfe of Elders Home Loans, we’re unlikely to see a negative cash rate in Australia.

"The Reserve Bank won't go to zero, but we will want to see a few quarters of positive growth before increasing the cash rate,” Rolfe said.

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