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Stamp duty hobbling housing mobility, economists say

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Stamp duty hobbling housing mobility, economists say

"Housing transaction taxes may lead to misallocation of the housing stock, by effectively discouraging young families to upsize their housing and by discouraging retiree households from downsizing."

The study found that while property purchasers technically paid stamp duty, really the effect was to reduce house prices by the same amount, meaning property sellers really bore the cost of the tax.

Abolishing stamp duty would lead to property prices rising by the same amount. But increasing property turnover would be of benefit to both buyers and sellers, Dr Leigh said.

"The most important thing is that some trades that were killed by stamp duty now take place. They benefit both buyer and seller, and the value of that happiness we estimate at around $500m per year."

The ACT government are transitioning to a higher land tax to offset the revenue loss. The only jurisdiction so far to adopt the Henry reviews recommendation. It is unclear how "a larger proportion of federal revenue" would work. Mobility is a positive for the economy however it seems that the motivation for this policy is to maintain high prices. The transaction costs lower house prices by a commensurate amount (which is true). However in the next breath the article suggests that prices would remain the same and it is of benefit that buyers and vendors that vendors receive the extra funds. I don't see what's in it for the buyers?

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Stamp duty hobbling housing mobility, economists say

The ACT government are transitioning to a higher land tax to offset the revenue loss. The only jurisdiction so far to adopt the Henry reviews recommendation. It is unclear how "a larger proportion of federal revenue" would work. Mobility is a positive for the economy however it seems that the motivation for this policy is to maintain high prices. The transaction costs lower house prices by a commensurate amount (which is true). However in the next breath the article suggests that prices would remain the same and it is of benefit that buyers and vendors that vendors receive the extra funds. I don't see what's in it for the buyers?

Someone on MacroBusiness said that the NT are doing so as well.

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