When you buy a house in Australia, the government is pushing ahead with a new plan to change the stamp duty system.
The plan aims to provide buyers with the option to pay stamp duty or land tax over the next 15 to 20 years.
The change is aimed at easing the pressure on families to pay tens of thousands of dollars to buy property, as well as the pressure on the government during a downturn in the property market.
"Stamp duty is one of the worst taxes, and no economist would say that stamp duty is a good tax," said Dominic Perrottet, the new state finance secretary.
If you buy a house in Sydney with an average price of 1 million yuan, the stamp duty you will pay is 40, 000 yuan.
"Stamp duty has not been adjusted for 32 years. The government has just been ignoring the problem, "said Tim McKibbin of the Real Estate Association.
Changing the stamp duty system can also change the state`s budget.
Two years ago, the new state government received 9.7 billion yuan from stamp duty. State revenues have fallen sharply this year, to only 7.7 billion yuan.
"Stamp duty accounts for 9% of the state`s total revenue," admitted Treasury Director Dominic Perrottet.
"of course, this adjustment is having an impact."
At the weekend, only 197 properties were sold at auction, compared with 411 at the same time last year.
The finance minister has assured taxpayers that the downturn in the property market will not affect infrastructure expansion in the new state.
"We are not like Western Australia," he said. "when the mining boom in Western Australia was gradually disappearing, their service supply was suddenly threatened."
The Productivity Council, Henry`s tax Review and Economic Development Council said the land tax on housing was better than stamp duty.
It will also clear the way for many sellers who are considering selling their homes. Currently, on average, property transfers take place every 12 years, compared with a few years ago, when they were changed every seven years.
State and federal governments need to work together to make the program a success.
