Despite apprehensively welcoming NSW government’s move to reform stamp duty at the time, the REINSW has now urged the state to follow the lead of Victoria in providing “immediate stamp duty discounts”.
A new statement from the Real Estate Institute of New South Wales (REINSW) said a quick glance at the housing market stimulus measures provided in the recently released state budgets “reveals a key, stark difference”.
It argues that while the Victorian government has provided actual tax relief to fuel activity, in NSW, the government has provided nil.
For REINSW CEO Tim McKibbin, it’s the “here and now” measures that remove the barriers of buying that the NSW budget “is regrettably lacking”.
He said: “The NSW budget has done nothing to stimulate the housing market aside from proposing an idea.”
“While we acknowledge that the reforms proposed require thorough consultation, and this takes time, stimulus is needed now,” the CEO continued.
Calling for “bold leadership” on the issue, he added that “timing has never been more critical – it’s well documented that an uplift in housing market activity delivers much broader economic benefits”.
“The challenge we face cannot wait months and years. It’s upon us right now,” Mr McKibbin said.
It’s why he, and the REINSW, is urging NSW to follow the Andrews government’s lead in significantly reducing stamp duty.
Mr McKibbin said Victoria’s approach “represents bold policy appropriate to the times, which is capable of delivering real, quantifiable benefits to the economy”.
He believes a similar strategy in the country’s most populous state would encourage both upsizer and downsizer activity through the removal of a major disincentive to move.
“This opens up housing supply, fuels more transactions, kickstarts the many flow-on economic impacts of a property transaction and enables housing to play the hugely influential role in the economy it is capable of,” he outlined.
From the REINSW’s point of view, there’s no reason stamp duty relief could not occur alongside consultation for reforms.
“In fact, the move could provide key insights of huge value to inform the reform process,” Mr McKibbin offered.
“It is accepted that whenever the rate of tax is reduced, market activity increases. This additional activity compensates government for the reduced tax collected per transaction,” he outlined.
“It’s like a retail sale. The profit margin on the sale items is smaller but more stock is sold, delivering an overall increase in profitability.”
The CEO said that by implementing stamp duty relief, the NSW government has “the opportunity to unlock similar activity on a larger scale and deliver broader economic benefits to the state”.
“Instead, all we have now is a lone consultation paper which distracts and diverts attention. It has generated headlines and opinion pieces about possible reform, perhaps to be implemented many months or even years from now, but fails to address the here and now problems.”