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Zed trots out stamp duty again

By johnboy - 25 July 2008 12

It’s a blessed day here in the RiotACT bunker having been blessed with TWO media releases from Liberal Leader Zed Seselja.

In the latest one he’s calling on the Chief Minister to use the now well-honed backflipping skills to make a cut to stamp duty, supposedly in the name of housing affordability.

I have a problem with this. When my friends buy their houses they find out how much they can borrow and then get the best house they can with the money available, including stamp duty and all the other overheads.

So cutting stamp duty won’t change anything. It will transfer money from the rate and taxpayers in general to the property vendors who will get to keep a larger chunk of the pie.

It’ll also be brillo for real-estate agents who’s slice of the pie is a fraction of the vendors. I suspect that’s where this idea is coming from.

But housing affordability? Supply and demand is the only thing that’s going to make a difference.

What’s Your opinion?


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12 Responses to
Zed trots out stamp duty again
Gungahlin Al 9:40 am 29 Jul 08

Indeed teepee, the Lib’s tactics are somewhat perplexing…

teepee 10:05 pm 28 Jul 08

Page 5 of Zed’s policy seems to agree with all this. I am surprised he hasn’t made more of his promise to increase land supply.

http://www.canberraliberals.org.au/files/7ES709NNVE/No%20Stamp%20Duty.pdf

And Labor’s land release stats on page 11 are also interesting reading. Again I am surprised more has not been made of that.

VYBerlinaV8_the_one_ 9:48 pm 28 Jul 08

Increasing supply is the only realistic option. It is going to take years to get the local market sorted with affordable housing again, but the first step is to reduce the scarcity of available land.

Gungahlin Al 1:12 pm 28 Jul 08

Problem is that Zed is so solidly wedded to this idea, that even when the degree to which it is a bad, ill-conceived and doomed to backfire is pointed out to him, he can’t back away from it.

But he should – he should just say “I’ve listened to what people are saying, and we’ve studied how the First Home Owners Grant backfired and instead forced up prices. Instead to help people trying to get into the property market, we’ll place temporary controls on how the LDA sets prices for new residential property releases.”

Because this is where there’s a rort going on.

The LDA (as the ACT Govt’s primary oligarchical land supplier) sets its prices via an independent valuer. Said valuer says “there’s an excess of unmet demand in the market, which has forced prices higher, therefore this batch of blocks will need to be priced at $XX,000 more than the last lot.”

LDA has 300 blocks for release, but 500 families left over on its books from last ballot. Spends small fortune on advertising campaign anyway. Big surprise – there are now 800 families bidding for those 300 blocks. 500 families go away empty handed.

Next batch of blocks to be released – independent valuer starts repeat of cycle, noting that the unmet demand has yet again driven up prices…

And so on – the principle land supply (the government) guarantees an ever-increasing revenue stream via drip-feeding supply.

Anyone from the ACCC on RA who can confirm whether such market manipulation would be tolerated in any other market?

peterh 11:51 am 28 Jul 08

Jazz said :

I always thought the whole point of stamp duty was to connect a property to essential services like water/sewerage and electricity. why then do we pay for it on already existing properties?

because it is attached, but not supplied. the transfer of ownership of a home must include the utilities as well, otherwise we would be copping old bills from previous places.

Jazz 10:01 am 28 Jul 08

I always thought the whole point of stamp duty was to connect a property to essential services like water/sewerage and electricity. why then do we pay for it on already existing properties?

pelican 9:24 pm 26 Jul 08

johnboy you are spot on. The trouble with taxes is that once they are introduced it is very hard to get rid off without risking the opportunists transferring the gains to, in this case, the property/real estate industry.

It is a case of the punters are already used to paying x amounts so any benefits from taxes paid will just be transferred to a niche private sector.

One wonders if the same would happen with fuel prices should duty or GST be removed.

Granny 12:56 pm 26 Jul 08

That is an excellent point, Johnboy.

I know nothing of such things, but all I can say is that if I were a mum living under the weight of trying to find such a large amount of rent money from the household budget each week; if I had a dream to own a home for my family and had been going without and salting away what I could; then if the government removed stamp duty today (say 5%) then if I had saved even $15,000 I could go out and buy a $300,000 house tomorrow on a 5% deposit.

As with aid in any crisis, there will always be a need for immediate relief and a need to plan and restructure for the future.

There are definitely a lot of individuals and families who need urgent help in the current economic climate, and I do hope that somebody does something to assist them.

bigred 10:46 pm 25 Jul 08

Cletus that is pure speculation

Cletus 9:40 pm 25 Jul 08

Abolishing stamp duty would increase speculation.

bigred 6:24 pm 25 Jul 08

In my view stamp duty should be abolished. It involves Government feeding off people when they are most stretched financially. Instead, if they must tax land impose a flat per metre charge bases on how much they need. While I accept the market will absorb any cut, it will eventually price itself in fully.

toriness 6:19 pm 25 Jul 08

exactly right johnboy.

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