The Real Estate Institute of New South Wales has called for a reduction of stamp duty amid the COVID-19 outbreak.
Tim McKibbin, CEO of REINSW, said a significant reduction in the rate of stamp duty will benefit not just the housing industry, but also the broader economy.
"Obviously, there are immediate economic benefits stemming from an increase in residential transactions. A property transaction sets in motion a ripple effect of other immediate business opportunities. And there's a longer game at play too," he said.
McKibbin said the stamp duty destined for the government coffers could be distributed through the economy, boost businesses, support workers, and reduce the size of the stimulus needed.
"And here's the kicker: because that stamp duty tax is there, the initial real estate transaction that could trigger this chain of events often doesn't occur in the first place. It's that significant a barrier, and even more so right now," he said.
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March figures from CoreLogic show that the current median house price in Sydney is $882,849. For this price, the stamp duty is around $35,000. McKibbin said reducing the rate of stamp duty will allow buyers to use the money to personalise their homes or even boost their savings.
"But they can't. That money is being withheld from the economy — at this, of all times in our history, as COVID-19 inflicts generational damage. It must change," he said.
McKibbin said the state government needs to "get with the times" and slash the stamp duty rate by 75%.
"In this COVID-19 world, the goalposts for every industry are shifting. Every business owner and operator are trying to keep the wheels turning. For real estate, and every business in the flow-on supply chain, stamp duty is the brake. Let's face it, 25% of something is a lot better than a 100% of nothing," he said.
