Changing stamp duty the way to improve affordability: Pilkington

Contact

Jan 11, 2017

Changing stamp duty the way to improve affordability: Pilkington

In the wake of the government's changes to planning rules, Laing+Simmons managing director and REINSW president-elect Leanne Pilkington has reiterated her view that changing stamp duty is the way to tackle housing affordability.

Laing+Simmons managing director and REINSW president-elect Leanne Pilkington.

In the wake of NSW Planning Minister Rob Stokes' proposals to overhaul the state’s planning system in a bid to tackle housing affordability, Laing+Simmons managing director and REINSW president-elect Leanne Pilkington says improving supply can be achieved more simply by modifying stamp duty.

Pilkington disputes the minister's claims he is trying to help first home buyers.

“While the industry would welcome measures that improve the planning system, through more efficient approvals and better consultation with communities, until the NSW government addresses the key barrier to affordability then it can’t justifiably claim to be supporting first home buyers,” she said.

Pilkington pointed out that stamp duty is a barrier to buying a property.

“The fact is that the huge cost of stamp duty in New South Wales is the biggest barrier to the purchase of real estate," she said.

She said that NSW's high levels of stamp duty prevent people from buying and selling property, and therefor contribute to the housing shortage.

"It (stamp duty) stifles transaction activity, puts increased pressure on prices and encourages people not to move, fuelling the supply shortage," she said.

Pilkington said preventing people from moving and buying and selling property has a number of flow-on effects.

“If people are discouraged or even prevented from moving, businesses like those making and selling household goods, homewares, furnishings, white goods and even tradies miss out.

“Then there’s the industry impacts. Fewer transactions mean fewer employment opportunities in real estate and associated industries."

“Getting rid of stamp duty would see an influx of properties come to market, placing downward pressure on prices and vastly improving affordability, all while unlocking flow-on economic benefits,” she said.

The sentiment has been echoed by other senior figures in the industry. Angus Raine recently indicated that stamp duty-free transactions for empty nesters, many of which own large family homes, could support upgraders and ease affordability pressure.

Pilkington explained that when the Northern Territory and West Australian governments reduced stamp duty, state revenues increased as a direct result because transaction volumes increased.