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NSW’s $4 billion surplus is a double-edged sword, the Property Council of Australia says, adding that while it is a sign of solid growth, it’s also making it difficult for Aussies to buy a home.
Property Council NSW executive director Jane Fitzgerald says nearly $6.3 billion raised by the state government from residential property buyers has placed an “incredible cost” on home buyers.
"If the NSW stopped its reliance on stamp duty and instead looked at other ways to raise revenue, house prices would come down and affordability would improve,” Ms Fitzgerald said.
If stamp duty was reduced by 50 per cent, it would knock $17,000 off the cost of a median-priced home in Sydney, she said. Scrapping it completely, which the Property Council is in favour of, would result in a savings of more than $35,000.
Ms Fitzgerald said the state budget should not be at the mercy of stamp duty revenue.
“Growth and investment are most welcome, but we need to look at whether the overall reliance on stamp duty is sustainable in the long term and if other revenue options are available to safe guard the budget against the ups and downs of the property market.
“From a high point of 40 per cent growth in stamp duty revenue in 2013-14, we are now looking at growth of 4.8 per cent per annum in coming years. Our budget is resting on a disappearing revenue base.
“The budget is also $260 million more in the black than predicted in June which means there has never been a better time to scrap the foreign investment tax – a tax on housing supply.
Ms Fitzgerald said the market is softening and it is not the time to be placing additional taxes on the industry.
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