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Real Estate Institute Backs Reducing Stamp Duty on Property Purchases

In May Representatives of the Real Estate Institute of NSW,  President Christian Payne and CEO Tim McKibbin met with New South Wales Treasurer Mike Baird to discuss how the New South Wales Government can  help stimulate the property market in NSW.

Amongst a range of issues discussed the Real Estate Institute of NSW put forward the argument that reducing stamp duty will stimulate real estate purchases and result in increased revenue to the NSW Government.  On their website the REINSW states –
“REINSW believes that the best way to bolster the NSW economy is for the State Government to act now and cut the rate of transfer stamp duty in order to stimulate transactional activity in the property market and as a result potentially boost state revenue by hundreds of millions of dollars.“

They cite the outcome for Governments that have introduced stamp duty cuts. For example:

  •  The ACT cut the top rates of transfer duty by 0.75 per cent last year, resulting in nearly $28 million in additional transfer duty this year.
  • Between 2006/07 and 2008/09 the Northern Territory cut their property transfer duty rates by0.45 per cent reaping an increase of more than $22million in revenue.
  • Western Australia also cut property transfer duty rates by 0.9 per cent and found that revenues rose by more than $709 million during the period.

This is strong evidence that decreasing property transfer duty rates does indeed boost revenue.  The REINSW also suggested at the meeting that the NSW Government should reinstate the first homebuyers’ incentives for purchasing existing properties. They felt that limiting the grant to cover purchase of new properties only had been a failure, causing a detrimental impact on the NSW property market.  Their position is that the Government should take steps to improve housing affordability, which will consequently improve the New South Wales economy.