Comments come as NSW's premier doubles down on commitment to phase out stamp duty in the state
Replacing the stamp tax with an expanded form of goods and services tax (GST) is likely the best way to tackle unaffordability in the housing market, according to the head of the Real Estate Institute of Australia (REIA).
At a recent parliamentary inquiry into housing affordability and supply in Australia, Adrian Kelly, president of REIA, said that eliminating stamp duty in favour of another tax such an expanded GST would help reduce prohibitive upfront costs for young first home buyers.
Read more: What stamp duty changes could mean
“We’ve always been supportive of broad-based tax in lieu of stamp duty, whether that’s a land tax or whether that’s something else,” Kelly told the inquiry, according to a report from the Australian Financial Review. “We already have the broadest-based tax in existence now, called the GST, but I can’t imagine that any government in the current environment would go anywhere near increasing that in lieu of stamp duty.”
And after the inquiry, Kelly confirmed to AFR that an expanded GST was the best way to replace stamp duty.
Kelly had earlier called stamp duty “a prohibitive tax for all home buyers” after a recent study conducted by SQM Research and REIA found that the tax had reduced the number of properties on the market.
“Stamp duties as a percentage of average national earnings have jumped over the past decade to 34.3%, from 25.1% recorded back in 2012 – up by almost one-third,” said Kelly. “In Sydney and Melbourne, stamp duties alone can represent nearly half the average national income.”
And his recent comments come as NSW premier Dominic Perrottet doubled down on his commitment to phase out stamp duty in the state and replacing it with a broad-based land tax.
"Stamp duty is an inherently terrible tax," Per said at a budget estimates hearing. "It's by far the most inefficient tax that we have in our state."