“Suddenly,Sydney looks more attractive than Melbourne if Melbourne doesn’t match this because you can spread that stamp duty burden over time,in a way that you can’t in Victoria,” he said.
“That’s good news for people who are thinking,‘well,do I want to live in Melbourne,do I want to live in Sydney’,and so I think Victoria will be under some pressure to respond to that.”
But Holden said the reported plan to exclude the top 20 per cent of NSW residential property prices was a mistake that risked creating a two-tier system,and with property prices “highly unlikely” to be a lot cheaper in the longer term,the proposal is likely to see a rising number of properties excluded.
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“They’re going to have to deal with it later on. In the meantime,there’ll be goodness-knows-what kind of distortions in the property market as a result of it,” he said. “They should just get it done right,now.”
Angela Jackson,of Impact Economics,said while it would ideally apply to all properties,some reform in this space was better than none. Stamp duty fluctuates with the value and volume of property sales,and an annual land tax would remove that volatility,she added.
Jackson said people currently face a significant impost at the point of buying a property,which stops some transactions from occurring – potentially dissuading people from downsizing when faced with a significant tax on a new property.