The revenue from stamp duty should be used to help first home buyers who are struggling to get their foot in the property market, according to the Real Estate Institute of New South Wales.
Figures from the Office of State Revenue reveal that stamp duty paid on residential property sales has increased by $500 million in the first quarter of this financial year, compared to the same period last year.
REINSW deputy president John Cunningham said this is well above what the government’s budget had forecast and it should be used more wisely.
“This is already more than double the June state budget forecast of a $200 million increase in stamp duty revenue for the entire 2014-15 financial year,” Cunningham said.
“It is now time for the NSW Government to stop gloating about an earlier return to surplus and instead give first homebuyers the helping hand they need by reinstating grants for existing properties, the real preference of those seeking to enter the property market.”
Cunningham says there is no excuse now for the government not to provide this much needed further assistance for first home buyers.
“The current incentives for first homebuyers are simply not working. By offering grants on new builds only, they are pitting first homebuyers against cashed up investors and as well as foreign investors.”
A review of the current rates is also desperately needed, according to Cunningham, who says that there has been no real review of thresholds for over 25 years.
“The only transfer duty rate change that has been made in NSW since the Duties Act came into force on 1 July 1998 has been the introduction of the premium property duty rate of 7% for residential properties in excess of $3 million,” he said.
“There has never been a review of the transfer duty thresholds in NSW to recognise bracket creep. The current two lowest transfer duty thresholds in NSW have been in place since 18 December 1974, 39 years, while the other thresholds (apart from the premium property duty) have been in place since 18 December 1986, some 27 years.”
With property prices well above what they were when these thresholds were introduced, the cost of stamp duty is a “major barrier” to entry for first home buyers.
“Now is the time to amend this injustice and further help first homebuyers and those seeking to upsize to the next level of property, which is being restricted by the current stamp duty farce,” Cunningham said.
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