Stacey Moseley and Steven Cross
The Real Estate Institute of New South Wales (REINSW) is urging the state government to cut transfer stamp duty rates in the state budget, but one leading principal believes it won’t happen in this lifetime.
In fact, Jason Boon, principal Richardson&Wrench Elizabeth Bay/Potts Point has gone as far as saying he would do a nude run down the main street of Potts Point if the government decided to cut the transfer stamp duty rates.
“I think it’s a great idea, and it will help of course. It won’t happen in my lifetime,” he told Real Estate Business.
“They can put as much energy as they like into it, but if you want me to be a realist I doubt very much that it will be reduced.
“If stamp duty is removed I will run down Macleay St in Potts Point in the nude, if it’s reduced I’ll wear a G-string,’ he promised.
According to REINSW President Christian Payne a cut in NSW transfer stamp duty rates of as little as 0.5 per cent would incentivise the property market and potentially boost state revenue by up to hundreds of millions of dollars.
“Empirical evidence of past property tax rate reductions shows significant consequential increases in government revenues,” Mr Payne said.
“The Reserve Bank’s action last week to reduce interest rates is a clear sign the economy needs stimulation.
“What NSW craves is decisive action by the state government to motivate the market,” Mr Payne said
“When property transfer taxes are too high, state revenue suffers. The abominated 2.25 per cent NSW vendor duty resulted in a loss of over $1 billion transfer duty revenue in the only full year it was in operation.
“In the first full year after vendor duty was abolished, NSW revenue from transfer duty increased by more than $1 billion.”
“What the NSW government needs to recognise is that because NSW transfer duty rates are too high, they are impeding state revenue and we need to cut transfer duty rates to increase state revenue,” Mr Payne said.
However Mr Boon maintains the change is unlikely.
“I’m a big supporter of it happening, but why would they remove it? They’re struggling for revenue as it is, why would they reduce what they already have,” he said.
The NSW state budget will take place of Tuesday, June 18 2013.