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REINSW calls for stamp duty relief in NSW
The Real Estate Institute of NSW today challenged the NSW Government and Opposition to promise further stamp duty relief to property purchasers in the lead-up to the State election in March.
“REINSW notes that the Beattie Government’s successful platform for re-election over the weekend included stamp duty relief for first home buyers in Queensland,” said REINSW President Cristine Castle.
“The Institute also believes there was some merit to the Queensland Coalition’s pledge to phase out stamp duty on property transactions within five years.
“The main political parties across the border have demonstrated a willingness to ease the tax burden on property purchasers and we call upon Labor and the Liberal/Nationals Coalition in NSW to consider stamp duty relief as they formulate their election campaigns.”
In NSW there is already stamp duty relief for first home buyers and in the current fiscal environment – with the NSW Budget $696 million in the red – a total phasing out of stamp duty is unlikely and potentially fiscally irresponsible. But the Institute believes there is still a rationale for reducing the tax burden on home purchasers, with the NSW Government expected to reap $5 billion in stamp duties in the 2006/07 financial year.
In particular, the Institute is lobbying for stamp duty relief for retirees who wish to downsize out of their large family homes into smaller, more suitable – and often more modern – accommodation.
The Institute’s initiative is called RAPP – a Retirement Assistance Purchase Plan – which would provide reduced stamp duty for people over 65 who are buying what will be their last home.
“Everybody knows of elderly people who are struggling to maintain large family homes, perhaps with flights of stairs that are difficult to climb,” Mrs Castle said.
“In many instances, these people would only be too happy to move into smaller, more modern homes which are closer to their families, medical facilities and public transport.
“One reason that they don’t is that the cost of State Government taxes and charges, such as stamp duty, is prohibitive.”
The transaction costs of buying and selling property can easily run to between $25,000 and $50,000.
Older people are therefore less likely to move houses than younger generations, with the most recent figures from the Australian Bureau of Statistics showing that only 10% of people who buy a new or established house are aged over 65.
There would also be some wider economic implications to RAPP.
Developers would have greater incentive to build retirement accommodation, while the construction industry would be boosted through renovations and redevelopment of the older houses.
“The potential social and economic benefits are enormous and include urban renewal, increased construction, jobs and better use of public infrastructure,” Mrs Castle said. “Recycling older homes may also reduce pressure on the NSW Government to release more land and should ensure a larger and improved stock of housing.”
The financial cost to the NSW Government would be minimal. Although it would lose out on some stamp duty from the older home owners, it would gain through the stamp duty on the sale of a home that may otherwise be unlikely to have changed ownership for years or decades.
“The Institute challenges the NSW political parties to take RAPP on board in the lead-up to the next election, to help breathe life back into the residential property market again and ultimately stimulate the state’s stagnant economy,” Mrs Castle said.
For media enquiries please call REINSW Communications Manager, Nicholas Campbell, on (02) 8267 0527.
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