The Business Council welcomes the opportunity to provide a submission to the NSW Property Tax Reform consultation paper. The BCA has long advocated for replacing stamp duties with a broad-based land tax and strongly supports this reform initiative.
The proposal has been put forward at a time the economy is recovering from an unprecedented economic crisis. There are further challenges on the road ahead, including from an ageing population, shifting global economic forces and increased digitisation. Australia's tax system must be fit-for-purpose to tackle these challenges, which means addressing several issues, including the volatile and inefficient state tax base - notably stamp duties.
Australia's tax system relies too heavily on taxes that impose high costs, particularly stamp duties. The Commonwealth Treasury estimates that each dollar of revenue raised through stamp duties on property costs the economy an additional 72 cents. A shift to a broad-based annual property tax, done the right way, could raise the same amount of revenue with a lower cost to society. It will help to boost home ownership, improve mobility and support the economic recovery.
NSW is leading the way for all other states through this reform. The consultation process, policy framework and administration could present a model for other states to emulate. This is a reform that is very much in the national interest and should be considered by all jurisdictions.
- The BCA supports in-principle the proposal to replace stamp duty with an annual property tax on an opt-in basis. The proposed policy framework provides a solid foundation for reform.
- BCA member companies have identified several issues that should be further considered through the consultation process. They include the interim effects of the policy, how to identify the status of properties, the treatment of amalgamated/subdivided properties, and the treatment of apartments and mixed-use properties.