Reforms to stamp duty announced by the NSW government is an insult to those people trying to purchase a home in the region, the REINSW has said, adding that it is nothing more than hype and bluster in the lead-up to election day.
REINSW CEO Tim McKibbin said that the Treasurer’s statement last week provides no genuine relief to home buyers.
He called the state government’s intention to index stamp duty to the CPI without actually adjusting the tax brackets “a real sleight of hand”.
“NSW Treasurer Dominic Perrottet has acknowledged that the stamp duty rates have not been amended since they were introduced in 1986 and then says that he is going to apply indexation to the set of tax brackets that are 32 years out of date.
“In 1986, the Sydney median house price was $93,576 and the median unit price was $86,109. At that time, the overwhelming amount of property transactions did not attract the higher rates of tax. Now with the Sydney median house price at $956,000 and the median unit price at $730,000, the overwhelming amount of transactions do attract the higher rates of tax.”
Mr McKibbin said that successive governments have unconscionably profited at the expense of home buyers.
“The first tax bracket tops out at $14,000. I ask rhetorically when was the last time you heard of someone buying a house for $14,000?
“Yes, indexing is good, and Treasury says had it been introduced 15 years ago then it would be better now. I agree. In fact, if it had been done 32 years ago, it would be even better and deliver a far more equitable outcome for the property consumer.”
Mr McKibbin said that if the government was serious about stamp duty reform, it would need to do more.
“It must adjust the brackets to reflect today’s median house price and then index it from there.
“To do anything other than that is delivering reform without substance and is just disingenuous political grandstanding.”
He added that the government’s own published data sets out “clearly” the continuing decline in property transactions and consequential stamp duty revenue.
“The irony? There is empirical evidence demonstrating that a reduction in the rate of tax will drive more additional transactions and consequently more revenue for government,” Mr McKibbin said.