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REISA wants stamp duty abolished to stop the state’s brightest from moving to the Eastern states

The Real Estate Institute of South Australia (REISA) wants its state government to replicate the move taken by the Victorian authorities in abolishing stamp duty for first homebuyers as it strongly believes the step would stem the outflow a huge brain drain from moving interstate.

“The state government is always seeking ways of making South Australia more attractive to our brightest and most entrepreneurial citizens so why are we giving them, even more, reason to move the East?” REISA’s chief Greg Troughton said.

REISA chief Greg Troughton

“We already have a brain drain to the eastern states.

“Housing affordability is a major player in the decision of our young South Australians on where they want to live, work and play,” he said.

Troughton added the state government needs to follow through the decision of the Victorian government and remove stamp duty on homes up to $600,000 immediately so that the property cycle can turn without impediment or unnecessary interference.

“While I am delighted that our eastern neighbours have seen the light and recognised that housing affordability is being severely affected by this heavy burden upon homebuyers, it is time now for South Australia to take this problem seriously,” Troughton said.

“It has long been established that stamp duty is a volatile and ineffective tax. While we recognise that property taxes are necessary to the state government, there is way too much reliance on them as their primary source of revenue.”

Troughton has also called for reform of the property taxation system in South Australia and the introduction of a higher GST to compensate the state for any loss in the stamp tax revenue.

 

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One Comment

  1. It’s nice to see the big States following the lead of the Northern Territory. Prior to the August 2016 elections in the Northern Territory the REINT lobbied for the removal of Stamp Duty on existing home purchases. It took us almost 15 months and an election to get traction with the politicians but what resulted was the Gunner Government removing Stamp Duty entirely on First Home purchases of existing property up to $500k (a saving of over $23,000) and proportionally up to $650k. This is now beginning to show results in what had previously been the worst sales market on record since 1990, with over 120 FHB’s purchasing since September last year. The Government added the incentive of an additional $10,000 available to First Home buyers of existing properties to allow them to do renovations using a Territory owned and operated company, thus stimulating the tradie market as well – AND $2000 of that grant can be used to purchase White Goods.

    State Treasurers are loath to let go of Stamp Duty revenue, but what they fail to recognise is that by doing so for First Home buyers, particularly targeting the existing market, is that they stimulate sales in other parts of the market that then return revenues they are not currently getting. If you picture the life-cycle of housing, first home buyers are normally looking at (or at least should be looking at) the lower end of the market, which is being vacated by the ‘aspirational buyer’ = generally people who have either outgrown their current dwellings or those now in an income bracket that allows then to upgrade. These aspriational buyers are normally looking at the larger, more expensive properties being vacated by the Empty Nesters who are ready to downsize. The empty nesters are a great target for new properties, particularly inner city unit developments. But it is the latter of these two groups, that if you stimulate activity in the first home market, will deliver new revenue stream in stamp duty.

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