The New South Wales government needs to correct its antiquated stamp duty brackets, according to the Real Estate Institute of New South Wales (REINSW).
Leanne Pilkington, president of the REINSW, said the industry body has continuously lobbied the state government in an effort to persuade them to address the punishing effects of stamp duty bracket creep.
“To date, government has chosen to ignore the damage these outdated tax rates are causing,” Pilkington said. “By doing nothing the government is simply profiteering at the expense of the consumer.
“The current NSW transfer duty brackets (other than the top bracket for residential land over $3 million) have been in place for more than 30 years. The Second Reading to the 1986 Bill, which on enactment increased NSW transfer duty rates and introduced the current base thresholds, included the following statement: ‘The increased rates for conveyances only affect properties worth more than $300,000 and thus will not affect the average home purchaser.’
“The median house price in Sydney is now at $1,179,519 [according to Q4 2017 data from the Real Estate Institute of Australia]. This clearly shows that the government is ignoring the market in which the current stamp duty rates were to apply.
“Last financial year, more than $7.3 billion was collected in stamp duty and to February 2018 the government has raised in excess of $4.7 billion, on par with the same amount collected in the first 8 months of that financial year.
Pilkington added that there was empirical evidence available that suggests reducing transfer duty will create greater volumes of transactions, which in turn will generate more revenue for the government.
“It is completely disingenuous for government to express sympathy for our first-home buyers and other property consumers and then rip them off with outdated stamp duty rates.
The NSW government needs to search for its conscience and fix these outdated stamp duty brackets.”
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