- HIA has provided a submission to NSW's Consultation Paper
- Supports proposals but says focus should be on actual benefits of reform
- Reform has broad support, including REIWA and REINSW
The Housing Industry Association (HIA) has provided a submission to the Consultation Paper- Buying in NSW, Building a Future and has additionally released its own Stamp Duty Watch report – which is designed to regularly review policies across the country.
In terms of stamp duty, the NSW Paper has proposed an opt-in/opt-out system whereby buyers can either pay a lump sum upon acquiring a property liable for stamp duty or pay an annual tax – similar to a council rate.
Despite being labelled as an inefficient and inequitable tax that does not provide a stable revenue stream, many state governments have become dependent upon stamp duty.
Tim Reardon, HIA’s Chief Economist, says that any reform surrounding the replacement of stamp duty needs to take into consideration the actual benefits of such reform – not just the complexity of the transition.
“A constant state of paralysis has resulted in a cascading of tax problems as state governments have become increasingly dependent on stamp duty for revenue.
“This is despite stamp duty being universally recognised as one of the most inefficient and inequitable taxes that does not provide a stable revenue stream.”
Tim Reardon, HIA Chief Economist
Stamp duty reform currently enjoys strong support.
Tim McKibbin, CEO of REINSW, listed it as one of his five opportunities for property reform in the state. REIWA has supported this, as has the Real Estate Institute of Australia.
Mr Reardon added that as with all sound reforms, benefits of stamp duty reform need to ensure households that might be disadvantaged are compensated appropriately.
Mr Reardon does acknowledge that the case for stamp duty reform is so strong that no matter what option is adopted, many will support it.
“Penalising households for pursuing home ownership does not lead to good economic or social outcomes.
“A workforce able to relocate in the pursuit of education and employment opportunities, without incurring punitive taxes, supports a range of family and community goals.
“Households able to move to a home that suits the size of the family and the location of their employment and studies can lead to a more efficient allocation of public investment in transport infrastructure.”
Tim Reardon, HIA Chief Economist
