> This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for so much stamp duty in one hit (easily 50-100k).
I don't understand. When you're making millions on the sale of the property, how is 100k in stamp duty a problem? It's on the same order as your agent's commission!
Why isn't every house incorporated (bought by a company, then have that company bought/sold instead of the house) ? Note: this is how it's done for a lot of houses in western europe, and there it's a 100% legal way to avoid this tax.
The problem is that you're going to have to pay 30% company tax on profits, and it's hard to get a mortgage. However this can always be structured so there aren't any profits (e.g. by improving the house, saving up for another house, ...)
I've read that Californian municipalities say that transferring control of the company that owns a property results in the underlying property being valued at current market prices. They'll get their tax regardless.
Your primary owner-occupied residence is exempt from capital gains tax in Australia. If you put a corporation in the middle, that exemption might vanish? (I don't know too much about the legal shenanigans here.)
If you want to leave your 4 bedroom, 1 million dollar property and buy a 2 bedroom, 1 million dollar apartment, you have to forego 100k just to do this? Obviously most people choose to not move. They'd rather the money goes tax free to their kids, or to just borrow against the house and spend the money.
It's a strange attitude to suggest that paying $100k to the government is 'not a problem' just because your house is worth more. If you were in the same position I think your attitude would change somewhat.
I don't understand. When you're making millions on the sale of the property, how is 100k in stamp duty a problem? It's on the same order as your agent's commission!