The New South Wales government should not turn to the property market to rescue the upcoming state budget, according to the Real Estate Institute of New South Wales.
“The recent federal budget has put pressure on the NSW budget, and Premier Mike Baird should not follow the lead of previous governments who have used the property market to raise additional revenue,” REINSW President Malcolm Gunning said.
“The property market is just showing signs of recovery and not all areas are enjoying growth. Property consumers and in particular first home buyers should not sit back and let this happen.
“The state government must not increase land tax and stamp duty to plug budget holes. We advocate for a broadening of the GST tax base and an increase in the GST rate. This should replace the revenue losses from the abolition of the discriminatory and inefficient state taxes.
“We do not support, and the community will not support, an increase in the GST to fund inefficiencies in Canberra.
“We have called on other state property institutes, associations and franchisors to voice their support for tax reform and we have already received backing.
“For too long the property market has been the state government’s cash cow and property consumers are now saying enough is enough.
“Already NSW can be expected to be at least $548 million* over budget in transfer stamp duty collections alone for 2013-14.
“Furthermore stamp duty rates have not been reviewed for 40 years. Bracket creep works in favour of government revenue and that is the reason it has not been reviewed. As a result of the failure to amend stamp duty rates, and the subsequent increase in property values over time, the average home is being taxed beyond that of which parliament initially intended.
“Change is long overdue and now is the time for Mr Baird to show he is a different sort of premier and remove these barriers to the property market and in particular provide support to first home buyers,” Mr Gunning said.