‘Pay as you go’ stamp duty scheme needed for first-home buyers: REINSW

The Real Estate Institute of NSW (REINSW)  is urging the state government to allow first-home buyers to pay off their stamp duty over three years rather than in one upfront lump sum.

The REINSW says its staged payment plan would reduce the burden of upfront stamp duty on top of the required house deposit for first-home buyers. 

Under the proposal, government revenues would be protected with the stamp duty obligation guaranteed against the property in exactly the same way as unpaid land tax and council rates.

The proposal is one of three initiatives the institute is proposing to the O’Farrell government two months ahead of the next state budget on June 12 aimed at stimulating the property sector

The other two proposals are for the overall rate of stamp duty to be cut and that urgent reform of planning controls should be undertaken to reduce the cost and red tape of new residential development to help alleviate the current undersupply of housing. 

“Housing supply and affordability are the key issues facing NSW and which need to be tackled head on in the upcoming state budget”, says REINSW president Christian Payne. 

“Convoluted planning controls are delaying the delivery of new housing stock, which is urgently needed to meet the growing demand of thousands of people flocking to live in Sydney. 

“As a result, housing affordability is being squeezed with many are simply unable to afford their own home. 

“Add to the already high price of real estate in Sydney the significant additional burden of stamp duty and you have a market which is pushing the Australian dream beyond the reach of many. 

‘It is only through innovation that we are going to make inroads into these problems," he says. 

“To that end, the REINSW stands ready to assist the NSW Government in developing further a range of initiatives which we believe could make a real difference to housing supply and affordability without threatening government revenues from taxation,” says Payne. 

The stamp duty proposals follows the NSW government ended its first home plus scheme on December 31, which provided exemptions or concessions on transfer duty for people buying their first home in NSW. 

It has been replaced by the first home — new home scheme, which limits the exemptions and concession to new homes or vacant land only. 

Research carried out by the REINSW shows that when property transfers taxes (stamp duty) were cut in Western Australia and the Northern Territory, government revenues actually increased.

“Between 2003 and 2006, Western Australian cut property transfer duties by 0.9% yet related revenues rose by $706 million. 

“Similarly in the Northern Territory property transfer rates were cut by 0.45% that resulted in an increase of $20 million in related revenue, a rise of 20%,” says the REINSW.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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