REINSW calls for shift away from stamp duty

103The Real Estate Institute of New South Wales (REINSW) is calling for changes to the tax system, with a range of suggestions outlined in an April 30 statement.

REINSW President Malcolm Gunning has called out current “discriminatory taxes” such as stamp duty.

Mr Gunning stated that stamp duty does not encourage growth in the property market. Stamp duty is applied to sales or transfers of land (including improvements) in NSW and is imposed on the purchaser or transferee.

The duty is calculated by establishing the value of the property, with various rates. For instance, properties valued between $300,001 and $1m are taxed at $8,990 plus $4.50 for every $100 where the value exceeds $300,000, according to the Office of State Revenue. However, rates are higher for properties valued over $1m, while there is a premium property duty for purchases over $3m.

The REINSW has said that the existing state-based tax system is halting economic growth and is in need of an overhaul in its April 30 statement.

“Instead we need a modern broad based tax system that will provide government with its revenue and not impede or deter investment. The current state tax system is adversely affecting the growth of the state’s economy,” suggested Mr Gunning.

An overhaul to the system could help stimulate growth, while a shift away from stamp duty would certainly be favoured by home buyers or investors in Sydney, where house prices may result in hundreds of thousands of dollars worth of tax by way of stamp duty.

“The time to act is now with increasing unemployment we must look for a modern tax system that will provide growth and employment,” stated Mr Gunning.

“Abolishing these inefficient and inequitable taxes will also mean industry and commerce’s compliance costs and the public servants administering the supporting bureaucracy in this area vanish.”

Stamp duty is a common topic for discussion in property circles and it will certainly be worth keeping an eye on any developments in line with industry figures’ suggestions.

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