Canning stamp duty could give rise to 25% more property transactions

The research, Stepped on by Stamp Duty: The Effect of Housing Transfer Taxes on Home Purchases and People Movement, detailed that the removal of stamp duty could see upwards of 100,000 additional moves each year in NSW alone.

That’s a 25 per cent increase in property exchanges over a 12-month period.

According to e61 Institute research manager Dr Nick Garvin: “Queensland acts as a natural experiment as they were the only state who made significant changes to stamp duty during this time so we were able to isolate its impact in a unique way. The stamp duty rise was politically opposed at the time and it had a significant impact on the housing market and mobility of people.”

The Queensland government had announced the removal of a stamp duty concession a few weeks before the policy change was enacted on 1 August 2011.

Between the announcement of the change and the date of enactment, there was a spike in purchases, before the number of purchases dropped and stayed low throughout the year.

The occupier concession was reinstated the following year, on 1 July 2021, following a change of government, with modelling showing transfer rates returned to similar levels from July 2011 and earlier.

In fact, the data showed the policy resulted in a 7.2 per cent fall in the volume of homes purchased that year. It also saw a 9 per cent (20,000 total) decrease in the number of people who moved. In addition, cross-state movements declined by 14 per cent.

Dr Garvin argues that the before and after seen across the state “is a stark example of the impact of stamp duty”.

As to the argument for the abolishment of stamp duty in 2024, he iterated: “We see that stamp duty prevents people from moving and therefore downsizing and possibly even changing jobs. With slowing productivity and problems with housing availability, removing barriers to job and housing mobility is critical.”