Stamp Duty on Home Loans Must Go: MFAA

Posted by LC Team, Monday, June 22, 2009

Stamp duty on home loans is an inefficient and unproductive cost that must be abolished, the Mortgage and Finance Association of Australia (MFAA) said today.

The wide-ranging tax review by Treasury Secretary Ken Henry is reportedly considering proposals to remove the stamp duty charged by state governments on housing loans.

Tax experts are reported to have told the Henry review that home loan stamp duty acts a barrier to moving house and creates inefficiencies in the wider economy by — for example — discouraging labour mobility.

“If we are serious about making Australia’s tax system more efficient, this is an impost that must go,” said Phil Naylor, CEO of the MFAA.

“Stamp duty on home loans is an inefficient and unnecessary cost on homebuyers.

“It acts as one more reason to stop borrowers from upgrading to a more suitable home or to move to where there are better work opportunities.”

“Removing the stamp duty on home loans is a simple measure that would boost activity in the housing and lending market and help drive the economy forward,” Mr Naylor said.

Tags: Ken Henry, MFAA, Phil Naylor, Stamp Duty, Tax Review

Filed Under: Consumer, Economics, MFAA

5 Comments

Bill June 22, 2009

Is there stamp duty on home loans today in NSW?
This was already recently changed.
Maybe this is still happening in other states?
We need to get rid of real estate purchase stamp duty.
This is the biggest barrier to the efficient flow of home sales.

Gordon Perkins June 22, 2009

There seems to be some misreporting in the Australian. Most States have already abolished stamp duty on home loans. South Australia’s duty phases out in a few days, leaving NSW as the only State charging stamp duty on mortgages and they have exemptions for residential property loans (both owner occupied and investment).

Later in the Australian’s article, the journalist started discussing conveyance duty. Perhaps this is the duty Dr Henry is saying should be abolished.

Greg June 22, 2009

Owner Occupied mortgage duty - cancelled as at 1/09/07 i.e. if for the purpose of owner occupied housing & no other.
Investment housing - cancelled as at 01/07/2008 i.e. if for the purpose of investment housing & no other.
01/07/2012 - Mortgage Duty will be abolished in NSW after this date.
Perhaps the MFAA should lobby for the abolision of Television and Radio licences - now there’s a headline grabber.