The REINSW has welcomed the NSW government’s revelation that it will be phasing out stamp duty, but warned that it won’t support the replacement of one property tax with a different property tax.
A statement from the Real Estate Institute of New South Wales (REINSW) has welcomed the state government’s acknowledgement that the state’s property taxation system is in need of reform, as evidenced in the state budget for 2020–21.
According to CEO Tim McKibbin, it’s a reform that’s been “long overdue” and one that has been actively sought for by the association for a number of years, and his latest comments come after he had previously considered that the NSW government was too “reticent to take a progressive approach” on the issue.
Noting stamp duty as “an efficient, inequitable tax that distorts market activity”, Mr McKibbin argued that the tax has discouraged people from moving as well as limiting the additional expenditure that home buyers could otherwise engage in.
“While there is no such thing as a good tax, some are better than others,” the CEO conceded.
“When tax becomes a consideration of a transaction and not a consequence, it’s a very bad tax.”
The CEO indicated that people in NSW have previously elected not to pay stamp duty — by not buying property — and so “on this basis, we welcome the news that stamp duty will finally be phased out in NSW”.
However, he flagged that the REINSW does not support the replacement of one property tax with another property tax, arguing that the property industry, including property consumers, carries a disproportionate amount of the state’s tax burden.
According to the CEO, a land tax may be “more broadly based than stamp duty, but it still only applies to property”.
“Investors in shares, for instance, pay no comparable tax.”
He flagged the not widely known fact that the NSW government collected $1,857,906,662 in stamp duty revenue in the three months to 30 September 2020.
Mr McKibbin said it’s $235,300,000 more than the same period last year.
It’s led the CEO to query: “Why the property industry, which contributes so significantly to the state’s economy, must shoulder a disproportionate amount of the state’s tax burden?”