Dr Henry says the stamp duties levied by state governments on property purchases create an unfair hurdle for young aspiring homeowners.
“It’s a big obstacle for first home buyers - saving for the deposit and then saving for the stamp duty - it’s just nuts,"he said."Particularly in Sydney,it’s a massive bill they’ve got to pay.”
“If stamp duty were abolished and replaced with an annual land tax,of course,over a 15-year period - or whatever it is - they’ll end up paying the same amount. But they don’t have to come up with all the cash up front.”
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Dr Henry’s successor at Treasury,Dr Parkinson,also backed the call to abolish stamp duty.
“I’m already on the record as suggesting we do that,with a switch to land tax,preferably,” he said.
Dr Henry helmed a landmark tax review a decade ago which also recommended abolishing stamp duty in favour of an annual land tax. Doing so would not only remove many"distortions"created by stamp duties,Dr Henry said,but also put state finances on a more sustainable footing.