Stamp duties, land tax and housing affordability: the case for reform

House prices and rents have increased ahead of average earnings over the last 25 years tipping more and more Australian households into housing affordability stress. The deterioration in housing affordability is in part due to a set of Federal and State tax arrangements that distort the use of land and buildings in ways that impair the efficient operation of housing markets. State government taxation of residential land and buildings in the form of stamp duties and land taxes are an important influence because they offer preferential treatment to land and buildings that are owner occupied