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OT: Current Affairs and Politics

Gronk

Gronk

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Staff member
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78,312
Bandwagon said:
Just imagine if you were this Q fella ( or fellas as it might well be ), kicking back in your basement and watching this shit unfold.

f**k it'd be hard not to out yourself as the greatest shit poster that has ever lived, and likely ever will.
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Don’t like the way he sledged you either mate.
1625778764348.jpeg
 
Gary Gutful

Gary Gutful

Post Whore
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53,239
Bandwagon said:
Just imagine if you were this Q fella ( or fellas as it might well be ), kicking back in your basement and watching this shit unfold.

f**k it'd be hard not to out yourself as the greatest shit poster that has ever lived, and likely ever will.
Click to expand...
Makes Old Tiger's stories seem pretty lightweight...
 
crocodile

crocodile

Bench
Messages
3,551
Gronk said:
Looks like NSW Gov is pushing ahead with their grandfathered stamp duty reforms.


www.smh.com.au

The San Francisco homes that prove why NSW stamp duty changes won’t work

NSW should be commended for attempting to reform stamp duty. But similar changes made in San Francisco show how a two-tier system can fail.
www.smh.com.au www.smh.com.au
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Stamp duty has one of the highest deadweight losses known. On this basis alone, the only policy to consider is to abolish it.
 
Gronk

Gronk

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78,312
crocodile said:
Stamp duty has one of the highest deadweight losses known. On this basis alone, the only policy to consider is to abolish it.
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So if you paid $1m for your forever home next week, would you prefer to pay $40k stamp duty up front or $2,000 per annum forever ?

BTW if you found your forever home and found out prior to purchase that the house was already in the new stamp duty regime pool, then you don't have a choice and have to pay the annual land tax, as the aim is to phase out ad velorem stamp duty over time.
 
crocodile

crocodile

Bench
Messages
3,551
Gronk said:
So if you paid $1m for your forever home next week, would you prefer to pay $40k stamp duty up front or $2,000 per annum forever ?

BTW if you found your forever home and found out prior to purchase that the house was already in the new stamp duty regime pool, then you don't have a choice and have to pay the annual land tax, as the aim is to phase out ad velorem stamp duty over time.
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That's an implementation issue. I'm not arguing about this. I'm just saying that stamp duty is a poor performing tax with high deadweight losses and a roadblock to movement. It needs to go. We can discuss other forms of revenue at some later time. To answer your question, personally, I'd rather pay 2k in perpetuity rather than a lump sum 40k.
 
I

Incorrect

Coach
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13,066
It would be one of the first things I'd ask about any home I was interested in buying. If it's part of the new regime and an annual fee is payable, I'd be putting a line through it straight away...f**k that
 
Gronk

Gronk

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78,312
Incorrect said:
It would be one of the first things I'd ask about any home I was interested in buying. If it's part of the new regime and an annual fee is payable, I'd be putting a line through it straight away...f**k that
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What do you think is going to happen rent if landlords have to pay an annual property tax ?
 
Gronk

Gronk

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crocodile said:
That would depend on implementation. A straight revenue neutral swap should see rents decline.
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The way I see it the "savings" on paying the stamp duty up from will simply give a buyer a greater purchasing power. They will buy for more and then (when faced with their higher outgoings) need to charge more rent. With the abolition of the land tax threshold, it will mean that Mum & Dad landlords of strata will have higher outgoings and charge it to the lessee.
 
crocodile

crocodile

Bench
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3,551
Gronk said:
The way I see it the "savings" on paying the stamp duty up from will simply give a buyer a greater purchasing power. They will buy for more and then (when faced with their higher outgoings) need to charge more rent. With the abolition of the land tax threshold, it will mean that Mum & Dad landlords of strata will have higher outgoings and charge it to the lessee.
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It's not that simple Gronk. There are quite a few things to consider. The real answer cannot be known until it is put through equilibrium modelling.

Abolition of stamp duty should lead to greater mobility and therefore wider choices of available properties. Prices are generally dictated by supply and demand.

You're also looking at the cost of stamp duty in absolute terms. In reality, the decisions to purchase will be decided on opportunity cost rather than absolute cost. This is actually true of most things we purchase. Gronk may not drive a Maserati because he would have to give up too many other things to have it. The opportunity cost of the Maserati may mean that Gronk can't by boat or a season pass to Parramatta games.

Simply multiplying the yearly land tax by the number of expected years and equating it to the value of the stamp duty ignores the fundamental importance of opportunity cost in having the lump sum available sooner rather than later. I know it isn't very intuitive.
 
Bandwagon

Bandwagon

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I don't think it's a given that the removal of stamp duty will simply be replaced by movement in house prices, for a start if replaced by a land tax that's an ongoing expense that has to be considered in terms of affordability on finance, that'll have some impact upon what people can borrow.

Further a land tax penalises wastage of resources, things like holding vacant property, living in too large a property for your needs, that kind of thing.

Removal of stamp duty also makes the market more fluid, downsizing/upsizing doesn't come with such a penalty, you create more buyers due to lowering the cost of entry, but you create more sellers, because sellers are also generally buyers.

Personally I'd have no issue opting in to the new system ( obviously pending the actual numbers ) If it was based over the course of 20 plus years, it's a no brainer for mine.
 
A

Angry_eel

First Grade
Messages
8,652
crocodile said:
That's an implementation issue. I'm not arguing about this. I'm just saying that stamp duty is a poor performing tax with high deadweight losses and a roadblock to movement. It needs to go. We can discuss other forms of revenue at some later time. To answer your question, personally, I'd rather pay 2k in perpetuity rather than a lump sum 40k.
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If you're not paying 2K per annum, you're assuming to be living in the property for more than 20 years. Actually more than that as 2K in 2042 will be worth less than 2K in 2022.

Very few people these days live in the same house once the kids are gone. In my street, 10 houses have been sold since I bought in 2017.

Sydney, at least is becoming a mover's city, even with it's overpricing and issues.

Having said that, I don't know what problem this solves. I can't think of 1 reason why the current stamp duty is better.
 
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