Downsizers have been given two pieces of good news - physical auctions and open home inspections are back at the same time as Australia’s two major States are examining radical changes to reduce the one-off impact of stamp duty.
Across Australia, States have largely lifted prohibitions on physical home inspections and on-site auctions linked to the coronavirus pandemic.
NSW now has the most flexible regime of any State, with up to 100 people allowed at auctions and group home inspections allowed as long as physical distancing of 1.5m applies.
On the other side, Tasmania now has the toughest regime, with restrictions on auctions and home inspections involving more than three people to remain in place until 15 June.
The table below provides additional detail:
|
State |
Auctions |
Home inspections |
|
NSW |
Allowed again from 9 May, up to 100 people and four square per person rules still apply |
Allowed again from 9 May, physical distancing of 1.5m applies |
|
Victoria |
Allowed from 14 May, no more than 10 potential buyers |
Allowed from 14 May, no more than 10 potential buyers |
|
Queensland |
Allowed from 15 May, up to 10 people can attend |
From 1 May, open house inspections were permitted with a maximum of six people inside the building at any one time, including the real estate agent - expanded to 10 people from 15 May |
|
South Australia |
Allowed from 11 May, restricted to up to 10 people |
Allowed from 11 May, restricted to up to 10 people |
|
Western Australia |
Physical auctions still prohibited, lifting of this restriction to be considered in next phase |
Up to 10 people allowed in inspections, from 4 May |
|
Tasmania |
Physical auctions won’t be allowed until 15 June (up to 20 people) |
Group open home inspections of more than three people won’t be allowed until 15 June (up to 20 people) |
Stamp duty set to be dumped
Separately, NSW and Victoria have given the strongest signals yet that they are looking to dump stamp duty, which is a major barrier to downsizing.
In an interview with the Sydney Morning Herald on 2 May, NSW Treasurer Dominic Perrottet said: “There is no better time to rid the states of inefficient taxes that hold back economic growth and I am talking stamp duty and payroll taxes."
A survey conducted by Downsizing.com.au and LJ Hooker in 2017 found that 30 per cent of potential downsizers believed that paying a reduced amount, or no, stamp duty would represent the one incentive which would help them downsize.
This finding was confirmed by a discussion paper released by the NSW Government in October last year, which also found that stamp duty is proving a major problem for downsizers.
The paper concluded that, as a result of stamp duty, “empty nesters may remain in large family homes rather than downsizing to a dwelling that better suits their needs as they age."
However, at this time, Mr Perrottet has not indicated what alternate taxing mechanism he will introduce, to make up for the cost of removing or reducing one-off stamp duty costs, when a property is purchased.
The Australian Government last year rejected a proposal by Mr Perrottet to raise the goods and services tax to compensate for the axing of stamp duty.
Separately, the Australian Financial Review reported that Victorian Treasurer Tim Pallas is backing the NSW Government on the need for tax reform, which includes the plan to ditch stamp duty.
ACT is the only province to act to reduce stamp duty to date
To date, only the Australian Capital Territory Government (a Labor-Greens coalition) has taken steps to wind back stamp duty, and replace it with an annual land tax. This new system will be introduced over 20 years.
However, the Liberal Opposition has pledged to put a four-year freeze to the reform, if elected in October this year. The Opposition claims the initiative has been poorly-implemented and is resulting in a greater tax burden on ACT residents.
