The need for stamp duty reform in NSW has never been more urgent, according to the head of a major real estate franchise.
Following on from the NSW planning minister flagging an overhaul of the state’s planning system, Laing+Simmons managing director and REINSW president-elect Leanne Pilkington has reiterated that the key to tackling the state’s housing shortage is abolishing stamp duty.
“While the industry would welcome measures that improve the planning system, through more efficient approvals and better consultation with communities, until the NSW government addresses the key barrier to affordability then it can’t justifiably claim to be supporting first home buyers,” Ms Pilkington emphasised.
Ms Pilkington highlighted that stamp duty is a “huge cost” in NSW and the “biggest barrier” to the purchase of real estate as it stifles transaction activity, puts increased pressure on prices and encourages people not to move, which fuels the supply shortage.
For many people, stamp duty makes it impossible for them to afford to move
“For many people, stamp duty makes it impossible for them to afford to move. But the impacts of this tax – for which consumers receive no service in return – run much deeper down the supply chain.
“If people are discouraged or even prevented from moving, businesses like those making and selling household goods, homewares, furnishings, white goods and even tradies miss out,” she said, adding, “then there’s the industry impacts. Fewer transactions mean fewer employment opportunities in real estate and associated industries.”
Abolishing stamp duty would allow for an influx of properties into the market, according to Ms Pilkington, as the move would put downward pressure on prices and “vastly improve affordability” while unlocking “flow-on” economic benefits.
She elaborated that there is a “clear precedent” for the new economic opportunities such reform could generate as state revenues increased for the Northern Territory and West Australian governments as a direct result of reducing stamp duty.
“The NSW government has previously ruled out stamp duty reform, presumably on the basis that it depends too heavily on the revenue from this tax, while ignoring the benefits other states and territories have derived through reform in this area,” she said.
“It’s now coming home to roost. The government is expecting reduced surpluses in years to come. Action on stamp duty has the potential to reverse the trend, open up new supply and improve affordability.
“The time has come for the NSW government to get serious about helping people, including first home buyers, as well as itself,” Ms Pilkington said. “The need for stamp duty reform in NSW has never been more urgent.”
Source: Mortgage Business