A property association is protesting against increased land tax and stamp duty being used to plug holes in the budget.
The Real Estate Institute of New South Wales said the NSW government should not turn to the property market to rescue the upcoming state budget.
“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, Gunning said.
Instead, REINSW advocates 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,” Gunning said.
“We do not support, and the community will not support, an increase in the GST to fund inefficiencies in Canberra.”
Stamp duty rates have not been reviewed for 40 years, he said.
“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.”
The NSW Office of State Revenue published statistics show transfer stamp duty revenue to the end of April to be $4,731, 853,867.
From the statistics, the monthly average collection of NSW transfer stamp duty over the first 10 months of this financial year has been around $472 million per month.
Assuming that NSW collects transfer stamp duty at the same average rate of $472 million per month for May and June this year, the total NSW transfer stamp duty revenue for 2013-2014 can be expected to be around $5,676 million – around $548 million above budget for 2013-14, Gunning said.
NSW Transfer Duty Budget 2013-14 was $4,960 million, but this was revised to $5,128 million in the NSW half yearly review last December.
“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,” Gunning said.
“For too long the property market has been the state government's cash cow and property consumers are now saying enough is enough.”