In recent weeks, the Premier of South Australia, Jay Weatherill, put the abolition of stamp duty onto the political agenda.
Premier Weatherill’s options for tax reform were detailed throughout the media, such as in this article from In Daily, Govt floats land tax for all, no stamp duty.
From a conveyancer’s perspective, there are pros and cons for abolishing ‘conveyance’ duties and it will be most interesting to see what becomes of this discussion.

The 900 pound conveyancing gorilla

To be frank, removal of stamp duty is likely to be very good for business in the conveyancing sector.
This is because removal of a one-off transaction would be replaced by regular transactions requiring regular input from professional conveyancers like ourselves.
One could argue, however, that conveyancing fees for overseeing stamp duty transactions make up a minimal part of the expense and is not the focus of these initiatives, especially with quotes like these from the tabled document:

[Stamp Duty is] … one of the least efficient taxes levied by the state, as it is a tax on transactions rather than value. Replacing conveyance duty with another tax on property is generally considered most equitable as it would balance any impacts on asset prices associated with tax reform.

A quick reflection on the changes reveals which way fortune might smile if these proposals are adopted.

The winners and losers of a broad based land tax

There is no doubt that property owners will all be affected in some way by the introduction of a broad based land tax.
Many property owners are likely to feel that the annual fee is an onerous burden.
That being said, I foresee three groups most likely to benefit from the change:

  • First home buyers because they will no longer need to access concessions
  • Home buyers struggling to get their deposits together because the bar will have been lowered
  • High turnover property investors who buy and sell a lot of properties because their costs per transaction will plummet

There is still a long way to go with this debate and many voices straining to be heard.
I suppose it reinforces my constant message that building a long term relationship with a trusted conveyancer is a worthwhile investment in peace of mind.