Finally a government who gets it

You know me, I’m never one to go easy on the government.

We’re like chalk and cheese. I go well with wine. The other is good for explaining things on the blackboard, but not much else.

But credit where credit is due.

Last year the NSW government scrapped stamp duties for first home buyers, and it worked. We’ve seen a mini-boom in first time buying.

In last year’s State Budget, the Berejiklian Government eliminated stamp duty for first home buyers purchasing a new or existing homes valued up to $650,000, and gave discounts purchases valued between $650,000 and $800,000.

And it did see first time buying pick up.

NSW Premier, Gladys Berejiklian, is calling it a win for housing affordability. From The AFR:

On Sunday, Premier Gladys Berejiklian said there had been 5400 more first-home buyers in greater Sydney since her government introduced stamp duty concessions in July 2017…

“I made helping first-home buyers one of my first priorities as Premier, so I’m thrilled that our stamp duty reforms are driving real outcomes for people in NSW,” Ms Berejiklian said.

“While we know there is always more to do on tackling housing affordability, the results so far clearly show that we are turning the tide for first-home buyers.”

Look at that pick up. Whoosh. That’s a rocket.

And it is what the data are saying. There’s been a very noticeable pick up in first time buying in NSW:

You’ve got to say that this is a good result.

And it’s not just about first time buyers, though it awesome that more young people were able to get a foothold in the market.

But what’s really awesome is that it proves that killing stamp duties is a great way to help with affordability.

I know this point should be obvious to any one with half a brain, but for decades now people like me have been trying to point out the idiocy of stamp duties to no effect.

Stamp duties serve no worthwhile purpose except to raise money for the government.

Many taxes do good things in a way. Take the tax on cigarettes. That makes cigarettes more expensive, and helps to discourage smoking.

And stamp duties? Well that’s a tax on buying and selling a home, and helps to discourage… buying and selling?

But hang on? Why would you want to do that? What’s the social evil that’s hidden behind a property transaction?

There isn’t one. In fact, there’s every reason why you want the market to be as fluid as possible. You want people who are ready to downsize out of a family home to find it easy to make way for a new family.

You don’t want to ‘discourage’ it.

Anyway, I’m going to work myself into a fit again, but the point is that, at last, there’s hope.

And the hope is that other governments around the country see what can happen when you axe stamp duties.

They can see that its good for affordability and it’s good for fluidity in the market.

All of these are good things.

Hopefully, governments around the country will follow suit and see the sense in scrapping stamp duties once and for all.

A boy can only dream.

Spiro Kladis
Managing Director, Cashflow Capital

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  1. Benny
    6 months ago

    Hmm – weren’t Stamp Duties one of those imposts that were to “Go” once GST was introduced?

    And, wasn’t it NSW under Bob Carr that INCREASED Stamp Duties about a decadeor so back that crippled the market?

    Thank heaven (as you say) someone now has the right answer. Go Gladys !!

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