Older South Australians could save up to $15,000 in stamp duty when downsizing under a new policy proposal announced by the Liberal Party ahead of the state election next month.
The Opposition says the measure is designed to help retirees who are “asset-rich but cash-poor”, and who feel unable to move because of the high upfront cost of stamp duty.
Stamp duty currently raises more than $1 billion a year for the South Australian government, but economists have long criticised it as an inefficient tax that discourages people from moving homes.
Liberal leader Ashton Hurn said rising property prices had made stamp duty a major obstacle for older homeowners wanting to downsize.
“Stamp Duty is a major barrier for older South Australians looking to sell large family homes and move into a more manageable space,” she said on Sunday.
“Under a Liberal Government, those moving out of their existing home will pay $15,000 less stamp-duty on their next home purchase, up to a property value of $1.2 million.”
Speaking at a campaign launch at the Adelaide Casino, the Liberal leader said the policy could also help free up larger homes for younger families.
“We want to ensure that big families can move into big homes and the way to do that is by providing this type of incentive so that downsizers as well don’t feel that financial strain,” she said.
The Liberals’ housing spokesperson Michelle Lensink said many retirees were staying in homes that no longer suited them because the cost of moving was too high.
“We’ve heard from so many retirees who’ve been paying taxes all their lives that they just can’t afford to move, they’re asset-rich but they’re income-poor,” she told the ABC.
“They are people who are trapped in their own homes as we speak because it’s all too hard. They may end up in a crisis situation where a partner dies or they need to enter aged care and suddenly it’s an emergency sale.”
Under the proposal, the Liberals have also promised to waive stamp duty for first home buyers purchasing a new or established property valued under $1 million. Currently, first home buyers in South Australia are exempt from stamp duty only when building or buying a new home.
Stamp duty reform has been debated across the country for years. Former Liberal leader Vincent Tarzia last year pledged to gradually phase out the tax in South Australia by 2041.
Other states and territories have explored similar changes. The ACT is currently partway through a 20-year plan to phase out stamp duty, replacing it with higher council rates and land tax.
Reserve Bank of Australia governor Michele Bullock has also criticised stamp duty, describing it as a “tax on mobility”.
“It’s not only a barrier to downsizing, it’s a barrier to people moving to find jobs. So it’s also a barrier to dynamism in the economy,” she said in October, noting the tax can make up as much as a quarter of a state’s revenue.
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