The Housing Industry Association (HIA) has renewed its calls for the New South Wales State Government to abolish the stamp duty.
Tim Reardon, chief economist of the HIA, said that the end justifies the means to end the stamp duty.
"The arguments for stamp duty reform are so strong that it doesn't matter which of these options is adopted, as long as the stamp duty is abolished," he said.
In November, State Treasurer Dominic Perrottet announced a proposal to make the stamp duty on property purchases optional.
Under the proposed arrangement, buyers will be able to choose between the current system of paying stamp duty or paying a lower annual tax as long as they own the property. . The new property tax will be a fixed charge, with a rate calculated based on the property's unimproved property value.
Reardon believes that the stamp duty has resulted in a "state of constant paralysis", with state governments becoming increasingly dependent on stamp duty for their revenue.
"This despite the fact that the stamp duty is universally recognized as one of the most inefficient and inequitable taxes that does not provide a stable income stream," he said.
Reardon stated that there are many strategies that can be implemented to abolish the stamp duty, including the phased approach or an 'opt-in or opt-out' arrangement.
"By replacing the stamp duty with a more stable, efficient and fair tax, we should remain focused on the benefits of reform and not on the complexity of the transition," he said.
Further, Reardon stated that there were many advantages to removing the stamp duty.
"A workforce capable of relocating in search of educational and employment opportunities, without incurring punitive taxes, sustains a series of family and community goals, ”he said.
The abolition of the stamp duty allows households to move to accommodation that suits the size of their family and the location of their employment and education. It also allows the aging population to be closer to their families and medical support.
"A stamp duty waiver also offers better land use as it penalizes low value land use in high land value areas," Reardon said.
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