REINSW CEO Tim McKibbin says the introduction of another tax on property is at direct odds with the Government’s supposed objective of seeking to improve housing affordability for first home buyers.

“To make something more affordable, Government should apply less tax to it, not replace one bad tax with another. Approximately 40% of the cost a consumer pays for a new property is taxes and charges. Reducing the tax burden and addressing the lack of supply is the most appropriate place to start the discussion about improving affordability,” Mr McKibbin says.

“Until real measures are introduced to address the undersupply of housing, prices will remain out of reach for many aspiring first home buyers. Excessive taxation not only inhibits purchasers, it inhibits supply, and today’s market is the result of decades of inertia when it comes to property taxation reform.

“Stamp duty tax brackets have not changed since 1986, since before most first home buyers were even born, and have therefore not been adjusted for CPI in over 35 years. It means more and more properties are subject to higher rates. The NSW Government collected over $14.5 billion in stamp duty for the financial year ended 30 June 2022,” Mr McKibbin says.

The REINSW has outlined possible solutions to improve affordability for first home buyers including exempting them from paying stamp duty to help them compete with other purchasers, and providing stamp duty relief for empty nesters, to encourage them to downsize and free up homes for growing families.

“Tax should be a consequence of a transaction, not a consideration. Unfortunately, stamp duty is a significant imposition and therefore a serious consideration for people contemplating a property transaction. The irony in the stamp duty debate is that there’s empirical evidence demonstrating that by reducing the rate of tax, more transactions will flow and the Government will actually receive more tax revenue,” Mr McKibbin says.

“But swapping one bad tax for another solves nothing, especially for first home buyers.”

According to Mr McKibbin, in addition to taxation reform, a much-improved DA process and clearer development guidelines at the local level are needed to improve supply, which is the single most important component of a coordinated affordability solution in NSW.