Softening stamp duty stumps up surplus
The 4-billion-dollar surplus announced today by the NSW Treasurer Gladys Berejiklian in her half yearly budget update indicates solid economic growth for NSW yet the state’s reliance on stamp duty is to the detriment of NSW families trying to buy a home.
“This budget update encapsulates the worst of stamp duty – it keeps house prices high while reducing market mobility in a softening market,” Property Council NSW Executive Director Jane Fitzgerald said today.
“The NSW Government has raised nearly $6.3 billion from residential property buyers across NSW to the middle of this financial year – an incredible cost placed on each and every home buyer in NSW.
“If the NSW stopped its reliance on stamp duty and instead looked at other ways to raise revenue, then house prices would come down and affordability would improve. If you reduced stamp duty by 50 per cent, you would knock over $17,000 off the existing price of a median priced home in Sydney. By scrapping it completely which the Property Council advocates for, you would save just over $35,000.
“Growth and investment are most welcome, but we need to look at whether the overall reliance on stamp duty is sustainable in the long term and if other revenue options are available to safe guard the budget against the ups and downs of the property market - our State’s budget should not be at the mercy of stamp duty revenue.
“From a high point of 40 per cent growth in stamp duty revenue in 2013-14, we are now looking at growth of 4.8 per cent per annum in coming years – our budget is resting on a disappearing revenue base.
“The budget is also $260 million more in the black than predicted in June which means there has never been a better time to scrap the foreign investment tax – a tax on housing supply.
“Moving forward, the market is softening and now is not the time to be placing additional taxes on the industry – although housing approvals may be high, we see a 40 per cent difference when it comes to completions, the figure that matters. We need to encourage housing supply to meet the demand of a growing population.
“The Government should be commended for delivering record levels of investment in infrastructure and now is the time to start looking ahead to more investment in heavy rail, light rail and freight options to enable high growth and so the District Plan job targets can be met.
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