As reforms are considered, the property industry says a depressed housing market is the best time to abolish stamp duty.

“Their stamp duty projections are bugger all. If youre going to swap into a new system, youre not giving up much.”
New figures from CoreLogic on Monday showed five out of eight capital cities suffered a drop in property prices in May as the pain from the pandemic spread to the housing market, with further falls expected in the months ahead.
The two largest states have been talking publicly for a couple of months about scrapping the transaction-based tax that accounts for about a quarter of their annual revenue and about $20 billion a year for the eight states and territories.
That move is likely to get a boost this week when former Telstra boss David Thodey delivers his Federal Financial Relations report to NSW Treasurer Dominic Perrottet. It is expected to back tax reform and abolish stamp duty.
Different models are mooted for replacing stamp duty which is more than $40,000 on a $1 million home in NSW and $55,000 in Victoria with an annual tax based on land value.
But any reform will require a long-term commitment. The ACT, for example, is 10 years into a program of replacing stamp duty with higher land taxes.
So far it has been a revenue-positive move, as land tax revenue has increased faster than stamp duty has fallen, but that was about to change, Mr Reardon said.
“In the next five years, we see the stamp duty threshold move above the average house price, this is the point at which the ACT government will start raising less revenue through stamp duty quite significantly and theyre not going to see the same increase in rates,” he said.
“You cant abandon that reform and end up with the worst of both worlds retaining an inefficient, inequitable stamp duty system and acquiring additional land tax imposts as well.”
A new system would have to be one that both of the main parties were prepared to support, Mr Capito said.
“Not only do you need bipartisan support for it, you need a system that is difficult to change going forward,” he said.
“The system needs to be locked in and loaded from the get-go so future parliaments you almost need some sort of unanimity to change the thing, otherwise a new government comes in, changes its mind and you get a bastardised system.”
Others said that even with the increased appetite for reform by state governments, such a change was unlikely.
“Stamp duty is such a revenue raiser for state governments, particularly in Victoria, that its very hard to see them giving that up,” said Anthony Webb, the chief executive of Melbourne-based agency PhilipWebb Real Estate.