The CEO of NSW’s peak real estate industry body has labelled the current stamp duty model as “a very bad tax”.
Real Estate Institute of NSW (REINSW) CEO Tim McKibbin said the stamp duty changes were long overdue.
“Stamp duty is an inefficient, inequitable tax that distorts market activity,” he said.
“Not only does it discourage people from moving, especially downsizers who would otherwise free up housing stock, it also limits the additional expenditure home buyers could otherwise engage in,” Mr McKibbin said.
The proposed change would mean stamp duty would be replaced with an annual land tax on new property transactions.
Home buyers would have a choice between paying a one-off stamp duty bill, which could be up to $100,000 in Sydney, or an annual property tax.
First-time buyers would get an extra incentive with a grant worth up to $25,000 under the proposed overhaul instead of an exemption from stamp duty.
“While there is no such thing as a good tax, some are better than others. When tax becomes a consideration of a transaction and not a consequence, it’s a very bad tax,” Mr McKibbin said.
“People in NSW have elected not to pay stamp duty by not buying property,” he continued.
“On this basis, we welcome the news that stamp duty will finally be phased out in NSW.”
“The property industry, including property consumers, carries a disproportionate amount of the state’s tax burden. It should be more equitably spread across all industries,” Mr McKibbin commented.