A NEW report released by the Chamber of Commerce and Industry WA has highlighted the inequity and regressiveness of stamp duty tax, arguing it limits movement between the regions and places a higher burden on struggling families.
Stamp duty creates about 20 per cent of the upfront cost of moving house, and for a full-time worker who earns the average wage in Western Australia and saves 15pc of their income, stamp duty adds 2.6 years to the time required to save a 20pc deposit for a house, the report said.
This acts as a significant blockage for those wishing to purchase a house, especially for first home buyers.
"Stamp duty is one of those long-standing, archaic taxes that is simply not fit for the modern world," the report states.
Property Council WA executive director Sandra Brewer agreed that "stamp duty is a shocker" and pointed out that property was the highest taxed sector in the economy.
The ANU Centre for Applied Macroeconomic Analysis said that "removing stamp duty can raise the annual housing turnover rate by 50pc, back to the level observed in the early 2000s".
Real Estate Institute of WA deputy president Joe White said housing affordability and planning reform could not be discussed without addressing property tax reform.
"It's a classic case of what should be easy is very hard politically because no one has the guts to do it," Mr White said.
"All the economists and practitioners agree it's a good thing to do, but politically people are too scared to do it even though they know it's the right thing to do.
"If they don't address broad-based housing policy encapsulating planning reform, tax reform and labour mobility - if a political party does not address those three keys in housing policy, my attitude is they don't deserve to be there."
However, when asked about his position on stamp duty reform, Premier Mark McGowan said a broad-based housing tax was not on his government's agenda.
"My fear is that this change would lead to more property speculation, increasing the cost of housing further," Mr McGowan said.
The New South Wales government recently announced that some first home buyers would be able to choose between paying stamp duty or an annual land tax, which many people such as Mr White have hailed as a great initiative.
"I think it'll be a superb idea," he said.
"The land tax is an incredible impediment to an efficient allocation of land, the impediment that it provides in the transfer of land is immense."
He said that every time an owner decided to move to a new property, they got "fined" by paying stamp duty, which prohibited people from moving as much as they would like to.
"For instance, you look at the farming areas where if it was just a flat rate land tax on everything rather than transfer costs, you would see farmers trading land so they have contiguous boundaries and they are more inclined to get efficient holdings," Mr White said.
"Say for argument's sake, your shire officers, your doctors, your health professionals, historically will move to a place for five years and then move onto the next.
"As far as the economy, those people are doing exactly what we want them to do, they are moving around from areas where the opportunities and their experience said they should be."
Mr McGowan said the NSW government's change in stamp duty was merely a revenue raising exercise.
"The NSW Liberal government's changes in this area are focused on securing new long-term revenue sources because of their skyrocketing debt.
"WA's responsible budget management over the past five years has ensured we have the best financial position in the country.
"Any changes to stamp duty would require the Commonwealth to step in and meet the subsequent short-term financial shortfall.
"Given the near-trillion dollar debt the new Federal government has inherited, I would expect there would be little appetite for this."
Ms Brewer and Mr White said they could see the benefits of an annual land tax, saying it would cost homeowners less in the long run.
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"The Property Council encourages the State and Federal governments to continue to consider how to effectively deliver property tax reform that doesn't cost homeowners and businesses more," Ms Brewer said.
The "ins and outs cost" of stamp duty discourages people from moving around and buying in towns where they are most needed.
"It's encouraging them to stay in areas of low opportunity rather than to areas with high opportunity," Mr White said.
"What happens to the person in that situation is every time they transfer a property, that additional stamp duty gets added onto their loan.
"So they end up financing the tax on a 25 year loan, which to me is ridiculous."
Mr White said the system was discriminating against people who need to move between towns for their jobs.
"A lot of the shire CEO contracts are five year contracts, so one of two things happen: they come and they rent and they move on and they miss the opportunity to maybe settle in a town they really like, because they don't really put down roots," he said.
"Worse still, they don't take the job at all."
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