The industry "takes no comfort in the current record prices"
It’s no longer a surprise that housing affordability and supply is at their worst, with houses being sold or leased at historical highs. As such, the Real Estate Institute of Australia (REIA) issued a simple three-point plan calling for a tax and supply reform to the Standing Committee on Taxation and Revenue.
Adrian Kelly, president of REIA, said the real estate industry “takes no comfort in the current record prices” from the lack of supply and excessive stamp duty, which is proven to drag down the number of properties on the market.
“Australians that you would normally expect are not ‘rightsizing’ at the rate you would currently expect due to being unable to purchase anything in the current market,” Kelly said. “This hesitation needs to be unlocked.”
As such, REIA is calling for three recommendations to the inquiry: remove punitive taxation on homes, build more houses and create a national performance-based housing plan between the state and federal government tasked to a Council of Ministers.
The possibility of slashing stamp duty is often pushed to the sides, but Kelly believes it might be an idea worth focusing on as the market transitions out of the pandemic and attempts to kickstart the economy.
“There is a lot of quantitative data outlining the significance of the current market, my hometown of Hobart has now hit a median house price of $1 million,” Kelly said. “This is driven by Australians escaping the cities, interstate and international competition and a strong preference for houses over units or apartments.”
Read more: Expanded GST best path to affordability, not stamp duty – REIA head
In a parliamentary inquiry, Kelly proposed an alternative to stamp duty: expanded goods and services tax (GST).
“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.”
