12 July 2016. The NSW Government has admitted that property transfer duty is an inefficient tax in its 2016 budget papers, according the Real Estate Institute of New South Wales.
REINSW President John Cunningham said a review of the tax system is necessary immediately.
“The NSW Government has openly admitted that taxes imposed on transactions, such as transfer duty [stamp duty] are relatively inefficient, because people react to them by moving home less often.
“Over and above the revenue generated, the state-wide economic cost for every million dollars of transfer duty revenue is estimated to be around $800,000,” Mr Cunningham said citing the 2016-17 Budget documents*.
“We again call for the NSW government to review stamp duty. Based on its own research the government should immediately cut stamp to encourage economic activity and address the inequities of bracket creep of this inefficient Tax.
“The state government have openly admitted that additional transactions would result from a reduction in stamp duty given that stamp duty would be levied on these additional transactions government revenue will not suffer. In-fact it would most likely improve based on similar changes that occurred in Western Australia and the Northern Territory when those states reformed their rates of stamp duty.
“It’s time to put first homebuyers first and provide them with the incentives to purchase property. What further proof does the government need to act?” Mr Cunningham said.