Industry leader calls for major tax reform

Industry leader calls for major tax reform

20 May 2016 by James Mitchell 1 comments

REINSW president John Cunningham says stamp duty is an “unjust, inefficient and market distorting tax” that must be removed. 

The plight of first home buyers, retirees and the effects of bracket creep have been reviewed by the Real Estate Institute of New South Wales ahead of the state budget on 21 June.

REINSW President John Cunningham said the institute has released a comprehensive assessment of tax policy in NSW.

“The ultimate goal must be to abolish stamp duty,” Mr Cunningham said. “It is an unjust, inefficient and market distorting tax.”

“In the short term however that is not possible, as it will require a coordinated and national response utilising non-market distorting taxation processes and positively discriminating toward broad based taxes as the funding alternative,” he said. “Nonetheless there are things we can do, and must do now.”

Mr Cunningham said the NSW government has left stamp duty rates unchanged for more than 30 years and that the government are “reaping the rewards at the expense of ordinary NSW citizens”.

“The NSW treasurer and premier must look to the lead of federal treasurer Scott Morrison who recognised the burden placed on middle Australians through bracket creep and lifted tax thresholds accordingly,” Mr Cunningham said.

“The NSW Transfer Duty already collected for the 9 months from July 2015 to March 2016 is $6.749 billion,” he said.

Mr Cunningham pointed to the NSW Half Yearly Review for 2015-16, which shows that stamp duty revenue in 2015-16 is forecast to be $863 million higher than at budget at $7.841 billion, while Land tax revenue in 2015-16 is expected to be $104 million higher than at budget at $2.764 billion.

“Based on Domain Group's March 2016 house price data, stamp duty of $31,827.50 would be payable on a property at the median Sydney house price of $807,500,” he said.

“On a house price of $1 million the stamp duty payable is $40,490, for houses over $1 million stamp duty payable is 5.5 per up to $3 million, and thereafter the rate becomes 7 per cent.

“This means that after the stamp duty is paid, a man or woman on an average wage (currently around $75,000 to $77,000) would have to work for five to six months in order to just pay the stamp duty.”

The REINSW president said the barrier to entry has become unjust and disproportionate over time.

“It is too much and is distorting social fortunes and creating a range of social challenges and consequences for young, middle aged and elderly people,” he said.

“Now is the time to review stamp duty bracket creep and create an environment that is fair and just for all.”

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2016

With a combined sales volume of $13 billion in 2016, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
William Phillips on how agents can expand their database and grow their business

In this episode of Secrets of the Top 100 Agents, host Tim Neary is joined again by William Phillips to discuss the real estate database and...

View all podcasts

Are dodgy agents being punished enough?

Yes (8.6%)
No (55%)
Only in some states (2.3%)
Not all dodgy agents are being found out (34.1%)

Total votes: 220
The voting for this poll has ended on: April 15, 2017
upcoming events
REB Awards
Sydney The Event Centre 12 Sep
REB Awards
Sydney The Event Centre 12 Sep
Melbourne The Event Centre 14 Oct
Brisbane The Event Centre 18 Dec
View all events
Do you have an industry update?