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The Real Estate Institute of NSW has called on the government to press ahead with a reduction to stamp duty, calling it an unnecessary burden to Australians.
In a statement issued to the media, REINSW said as COVID-19 “threatens to tear the economy apart, a substantial reduction of stamp duty represents a lifeline”, noting that the state government “needs to get with the times and slash 75 per cent off”.
“Obviously, there are immediate economic benefits stemming from an increase in residential transactions,” said REINSW CEO Tim McKibbin.
“Yes, there’s agents, but there’s also the marketers, the signage producers, the copy writers, the photographers, the IT gurus, the stylists, the surveyors, the conveyancers, the pest and building inspectors, the removalists and more. The list goes on and on.”
“A property transaction sets in motion a ripple effect of other immediate business opportunities. And there’s a longer game at play, too.”
To further his point, Mr McKibbin pointed to recent CoreLogic data, which showed the current median house price in Sydney sits at $882,894 as of March 2020.
The purchase of a home for this price incurs stamp duty of just over $35,000.
“Then consider this: When people buy a new home, they typically want to personalise it, make it theirs, fix a few things up, change this and that, a new coat of paint, fresh carpet, new floorboards, some new furnishings and fixtures. Or perhaps it’s more substantial: knock out a wall, convert the study to a nursery, replace the bathroom, redo the kitchen,” Mr McKibbin noted.
“They could really use a portion of the stamp duty that is thrown away on the purchase. And the painters, tilers, chippies, carpet layers, cabinet makers, whitegoods specialists and every other conceivable goods or services supplier would love that buyer to have that money in their pocket, too.”
“But they can’t. That money is being withheld from the economy. At this, of all times in our history, as COVID-19 inflicts generational damage. It must change.”
“That stamp duty destined for the NSW government’s coffers could otherwise be distributed through the economy, to benefit a multitude of businesses, to reduce the size of the stimulus needed, to support workers at this terrible time.”
“And here’s the kicker: because that stamp duty tax is there, the initial real estate transaction that could trigger this chain of events often doesn’t occur in the first place. It’s that significant a barrier, and even more so right now.”