The groups renewed their calls for the removal of stamp duty in New South Wales as the state government opens a public consultation on tax reform.
Adrian Kelly, President of the Real Estate Institute of Australia, said property transfer stamp duty is the second largest source of tax revenue, generating 24% of the state's overall tax revenue.
However, this is a very volatile tax, with revenue fluctuating by over 50%. "Stamp duties on means of transport are incompatible with the needs of a modern tax system and should be replaced with a more efficient means of increasing revenue," he said.
David Bare, executive director of the Housing Industry Association, said the ineffectiveness of the stamp duty as a tax makes it crucial for the state government to consider removing it.
Bare said the impacts of the COVID-19 epidemic on the economy, housing market and population growth reflected the weakness of the stamp duty as a source of revenue for the country. 39; State.
"The stamp duty is an unfair tax that weighs on a small cohort of taxpayers who have to relocate for a variety of reasons including employment, education and training, health, or financial reasons ", did he declare. "It has a disproportionate impact on vulnerable households who are facing significant changes in their living conditions, so they have to relocate."
Bare said stamp duty depends on two main factors: house prices and the volume of transactions made in the market. This means that this tax regime is subject to "the vagaries of the real estate market".
"When the real estate market is booming, stamp duty provides windfall revenue. Likewise in times of weak housing market, stamp duty revenue also declines and weighs on budget results", did he declare.
However, stamp duty bills have risen almost three times as fast as house prices since the 1980s. In New South Wales, the typical stamp duty bill has risen from 1.6% to 3.8% of the median house price between 1982 and 2017.
"Stamp duty rates have not been reformed since 1985, when the average house price was $ 70,000. Hikes in house prices are causing stamp duty bills to accelerate because that the stamp duty rate ranges are seldom updated. This is the stamp duty drift problem, "Bare says.
Ray Ellis, CEO of First National Real Estate, said first-time homebuyers would benefit the most if the stamp duty was removed.
"First-time homebuyers would definitely be beneficiaries because they wouldn't need to save so much money to buy their first home", a- he declared.
There are proposals to replace the stamp duty with a general property tax. However, Ellis said this would put Australians who are rich in assets but poor in cash at a disadvantage.
"These are the people who budget carefully so that they can stay in their beloved homes, close to family, friends and essential amenities. Millions of Australians, including this group, would be required to pay annually bills equivalent to advisory rates, or potentially much more, ”he said.
Ellis said this raises concerns about whether these Australians would be subject to double taxation or be forced to sell. Plus, he expects this to force older Australians to consider reverse mortgages.
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