Another shot has been fired in the stamp duty debate, with the Real Estate Institute of New South Wales calling on the state government to review how the levy is determined.
REINSW president Malcolm Gunning, who has long called for stamp duty to be abolished, believes the time is right for the government to take the first step in easing the imposition the levy has on buyers by reviewing the current brackets that determine stamp duty targets.
“While we are calling for an abolition of stamp duty, a first step, as a revenue neutral initiative, is to address the stamp duty brackets which have not been adjusted for 30 years,” Gunning said.
“Something can and should be done now. The message is clear and simple, review outdated stamp duty brackets and the additional market activity will have a positive flow on effect for the entire NSW economy,” he said.
Current NSW Stamp Duty Charges
| Value of the property subject to the transaction
||Rate of duty
|$0 - $14,000
||$1.25 for every $100 or part of the value
|$14,001 - $30,000
|| $175 plus $1.50 for every $100, that the value exceeds $14,000
|$30,001 - $80,000
||$415 plus $1.75 for every $100, that the value exceeds $30,000
|$80,001 - $300,000
|| $1,290 plus $3.50 for every $100, that the value exceeds $80,000
|$300,001 - $1m
|| $8,990 plus $4.50 for every $100, that the value exceeds $300,000
|| $40,490 plus $5.50 for every $100, that the value exceeds $1,000,000
|Premium Property Duty: over $3m
|| $150,490 plus $7.00 for every $100, that the value exceeds $3,000,000
|Source: NSW Office of State Revenue.
RELATED: Stamp duty burden grows
While stamp duty is one of NSW biggest revenue streams, Gunning believes the government's bottom line would not be affected as reduced rates would encourage more sales and thus make up any short fall.
Catherine Simons, a director of financial service and accounting firm WSC Group, supports that view.
"The brackets are definitelty something the government should be looking at, especially looking at marking the charges more reasonable at the lower end of the market and for first home buyers," Simons said.
"The rates as they are now are definitley prohibitive to sales in some areas of the market, older people who might be looking to downsize are reluctant to do so because they don't want to be hit by stamp duty.
"But if the charges are made more reasonable then more people are likely to buy and sell, which means the government isn't going to lose out."
While Simons would like to see the levy reviewed, she said it's unrealistic to hope it will be abolished in the near future.
"Looking at the balance sheets of state governments, especially NSW's we're propbably not going to see it go away any time soon.
"It would be a great thing for those buying and selling property
, but given how important a source of revenue it it is I'd be reluctant to say that it will be scrapped in the next decade."
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