Tim McKibbin, CEO of REINSW spoke to WILLIAMS MEDIA about the state of stamp duty in NSW, following reports that Boris Johnson is urging Prime Minister Theresa May  to “Cut 'absurdly high' stamp duty to end Britain's housing 'disgrace'”.

Mr McKibbin said “Stamp duty is one of the most inefficient and inequitable taxes we have".

“People no longer want to transact property because of taxation.

“Taxation should be a consequence of a transaction not a part of the decision making process."

He said properties used to be turned over every seven years on average, due to circumstances changing and families growing, but now people aren’t selling and are renovating instead.

Related reading: First-home buyers are back in the market

“Families would expand and move into a house after owning a unit, but now they are electing to stay where they are and renovate rather than finding a new property.”

The stamp duty rates currently applicable are 32 years old.

“This is an unconscionable action by the NSW government.

“When the then Treasurer bought the rates into Parliament he said that these rates will only apply to properties over approximately $300,000, and will only affect a very small percentage of the population who are buying those extremely expensive properties.

“The median house price is currently $1 million in Sydney.

“The NSW Government by ignoring stamp duty rates have effectively profited unjustly,” Mr McKibbin continued.

“The rates we have now were never designed to capture these transactions.

“Back then approximately 99 per cent of transactions did not hit $300,000, and now 99 per cent are captured and one per cent are not. This is dreadfully unjust.”

penthouse-1-four-seasons-199-george-street-sydney-adfb4bdd-d660-40f2-90ed-bf8aca5dd4f2.jpg

Penthouse 1 Four Seasons 199 George Street, Sydney for sale by Francis Fusco of Ray White, as seen on Luxury List

Simon Doak from 1st City real estate agrees that there needs to be a complete overhaul of stamp duty.

“Rather than upsizing, families are finding ways to expand their houses and get further longevity.

“A couple of businesses are making really good headway from this.

“I have a client who has a $4 million house and wants to buy a $7 million house.

“They are considering extending their existing home rather than paying the stamp duty for a second house.”

Related reading: Australians are holding onto their homes for longer

Mr Doak believes there should be stamp duty concessions for the elderly.

“They are coming out of old, established homes wrapped up in assets and are wondering why they should move when they don’t need to.

“Stamp duty should be halved for them when they are moving into smaller homes.”

Mr Doak said while the issue has always been there it is definitely more prevalent in the last few years.

“Particularly with price hikes, the state government is making a fortune.

“We need a restructure of stamp duty so people will find it more palatable to move homes.”

Related reading:

What you need to know about stamp duty

HIA stamp duty report fuels calls for national review of property taxes

How to transition from stamp duty to property tax