John Cunningham, president of the Real Estate Institute of New South Wales (REINSW), has urged Gladys Berejiklian, the state’s newly appointed premier, to review the tax system, especially stamp duty.
According to Cunningham, former premier Mike Baird had taxation reform firmly on his agenda.
“It's time for his successor to deliver something back to property consumers,” Cunningham said. “The NSW government has seen windfall after windfall in recent years and it is time to give back. We urge Premier Berejiklian to recognise that stamp duty has not been reviewed for 30 years.”
Berejiklian previously stated that housing affordability would be one of her top three priorities as premier, but ruled out reductions to stamp duty.
Stamp duty is one of the biggest issues affecting housing affordability in Sydney, where buyers paying the median house price have to fork out around $36,000 in taxes and fees to the state government. Research indicates that between 35-40% of the cost of new homes in NSW comes from taxes, fees, and charges levied by all levels of government, with the state government levying the heaviest taxes.
Cunningham wants Berejiklian to reinstate incentives for first-home buyers who want to purchase existing properties costing less than $1 million, reducing their stamp duty by 50%.
“We also urge her to provide the ability to pay the stamp duty over time…to ease the housing affordability crisis that we are experiencing.”
The NSW government currently enjoys a budget surplus, projected to be $4 billion in the current financial year – a feat achieved largely by taxing the housing industry.
“By cutting stamp duty we are not asking [the] government to reduce its revenue,” Cunningham said. “To the contrary, we believe, based on…experiences in other states, that a reduction in the stamp duty rate will generate additional market activity.”
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