Indexing stamp duty is a step forward in cutting tax on housing. It’s the first adjustment to stamp duty rates since the average house in Sydney cost $80,000. State governments have become increasingly reliant on it as a main revenue source.
About $1 in every $5 of state-government revenue comes from it. The announcement by the NSW Government to address bracket creep for the first time in over 30 years helps ensure stamp duty won’t keep growing. It’s an inefficient tax with a disproportionately high impact on households. It’s also a volatile source of tax revenue, as the NSW Government is currently experiencing.
It should be phased out.