Parliamentary inquiry will be told to abolish stamp duty for a broad-based tax

Friday 5 July 2013 @ 8.48 a.m. | Taxation

The State Parliament's Economic and Finance Committee inquiry will be advised today that stamp duty should be abolished and replaced with a broad-based land tax. 

The proposed tax, which would operate similarly to council rates, would ensure sustainability of public services and help to give governments a more stable income stream. 

SA Council of Social Service executive director Ross Womersley has said that state revenues are at historically low levels, with income streams having been eroded since the global financial crisis.

Business groups have backed one proposal as a means to reduce the upfront cost of property purchases and stimulate activity. The possibility of introducing a broad based land tax was considered by the State Government more than a year ago; however, critics labelled it a "tax on the family home," and the proposal was dropped.  

Mr Womersley has said that other types of reform should be considered. These might include modifying existing land taxes on rental properties to remove disincentives for investment in affordable rental. Another proposal is the introduction of an "unused building tax" on property which is not serving the public benefit.

The inquiry will also hear submissions from business groups, including suggestions for a GST increase to fund the abolition of inefficient state taxes.

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