Author: REIWA President Damian CollinsStamp duty is widely considered the most economically inefficient tax currently imposed by State Governments. Not only that, it’s also the biggest barrier to home ownership and significantly restricts people’s ability to move homes. REIWA has and always will be a strong advocate for the removal of stamp duty on property transactions and have it replaced by a broad-based land tax system. We were glad to see the New South Wales Government recently launched a review into its removal and we strongly urge the Western Australian Government to do the same. Why now?Many might be asking why the government should be looking at it now. It is expected that property transactions will be lower for some time, which means the proportion of revenue the government generates from stamp duty is likely to be at the lowest levels in at least 15 years. This is why we need to look at an option that will help remove barriers to mobility and home ownership, whilst also providing a smarter taxation model to help the government in the long run. How would a broad-based land tax work?A broad-based land tax would see the upfront stamp duty payment abolished and replaced with yearly payments that would be calculated and paid in a similar way to how property owners currently pay their rates. Spreading the cost of property taxes across many years will make home ownership a reality for more West Australians, while creating a steady and reliable stream of income for the State Government. Breaking down the costsFor those who have already paid stamp duty on their properties in recent years, phasing in these changes would ensure property owners were not taxed twice in a short period of time. If a family saves $50,000 for a home deposit, which is no easy feat, and is looking to buy a home at the current median house price of $495,000, a significant amount of $17,765 of that deposit will go towards stamp duty. For those who need to factor in Lenders Mortgage Insurance due to the payment of stamp duty, an additional $16,010 would be required. More informationStamp duty is the single biggest hurdle for prospective home owners in WA entering the property market and with the 2021 State Election fast approaching, REIWA is urging all major political parties to put the abolishment of stamp duty on the agenda. For more information on REIWA's advocacy efforts, visit our advocacy page.