The NSW state government is preparing a raft of tax reforms, including payroll and stamp duty relief, as the government tries to reignite the local economy.
While the outbreak of the pandemic has punched a hole in the economy, NSW treasurer Dominic Perrottet on Saturday laid out a plan to scrap what he described as inefficient taxes.
Mr Perrottet told the media that: “We are not going to tax our way back into prosperity.”
The treasurer said that stamp duty was at the top of his hit list and his plan will also focus on productivity, deregulation, digitisation, trade and investment.
The calls to remove stamp duty is widely supported by industry experts, with REINSW saying that while there is no such thing as good tax, it is universally accepted that a broad-based tax system lessens the impact on economic activity.
REINSW CEO Tim McKibbin said “the acquisition of goods and services subjected to the impost of the goods and services tax (GST) – a broad-based tax – rarely if ever influences the consumer’s purchasing decision. By contrast, transfer (stamp) duty is a very narrow-based tax and is a significant cost attaching to the acquisition of a property”.
Upside Realty CEO and founder Adam Rigby believes the tax is having an impact on older Australians who are forced to live in homes no longer suitable for their stage of life because of fears and uncertainty about the cost of selling.
“This is one person living in an otherwise empty six-bedroom house – there are more than 100,000 underused houses in NSW and Victoria alone,” Mr Rigby said.
“The increased expenses associated with running these homes is dangerously eating into retirement funds and locking families and first home buyers out of the market.”
The latest ABS data showed that 49 percent of Australians are living in underutilised dwellings – in houses with two or more empty bedrooms. A number which Mr Rigby said increased throughout the property downturn last year and has now spiked with the drop in sales volume led by the COVID-19 outbreak.
“In the last month, we have seen a 28.7 percent decrease in sales volume compared to 2019, a year which was already substantially down, compared to previous years.”
“This stalemate has been going on for the last 18 months or more.”
“Seniors keep delaying a downsize because they are unsure about the market, and they know they will be slugged with a huge tax.”