UDIA welcomes the progress on Property Tax and calls on Federal Government to back productivity gains
Stamp Duty is one of the biggest financial barriers to home ownership and is widely regarded as a regressive tax. By undertaking a major structural reform to replace stamp duty with a Property tax, the NSW Government would take a positive step towards boosting confidence in the economic management of the state, encouraging investment, creating jobs and homes for the people of NSW.
UDIA NSW Is pleased with the progress that has been made by the NSW Government on the Property Tax reform, as this type of structural reform that increases productivity, is desperately needed in Australia, if we are to see rising wages and prosperity in NSW.
However, the transitional costs of the reform are challenging for a state budget. Given this, UDIA believes that the Federal Government should support major structural reforms by providing financial incentives for states to undertake them. The structural reform will have the positive effect of encouraging investment into NSW, resulting in increased productivity, creating jobs and higher wages, and supporting the development and ongoing improvements to living standards, both in the cities and in the regions.
“NSW is facing a housing supply and affordability crisis and reducing transaction costs will make home ownership a reality for more people in NSW.“ said Steve Mann, CEO, UDIA NSW.
In our recent Submission, UDIA NSW outlined how the Property Tax Reform can help support the sector with the delivery of new homes and cement the economic recovery from the COVID Pandemic, including:
- The removal of an upfront transaction cost will benefit residential markets, improve mobility and unlock greater productivity and market capacity. A more productive NSW economy will raise incomes and all other things being equal, enable more people to afford ‘the great Australian dream’ to buy a home;
- Encouraging the more efficient and productive use of land, helping to support place making that enables Transit-Oriented Development, 30-minute cities and smart densification. The apartment market in NSW has dramatically declined and with less land the lower taxes for apartments will provide some much-needed support;
- Enabling people to right-size their home to meet their needs, upsizing when their family is growing and downsizing as they get older and their children have fled the nest, supports demand for housing diversity; and
- Increasing property transactions, will support the housing market to deliver new homes.
“We look forward to continuing our participation in the reform process as a key partner in leading the industry working group with NSW Treasury to enable the reform that will deliver long-term benefits to NSW and its people.” added Mr Mann.
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