The country’s leading real estate organization has announced the launch of its new national and multi-annual campaign called “Ax the Tax,” which aims to start a nationwide conversation to remove stamp duty from the overall cost of buying a home.
REIA President Hayden Groves said that as country is going through the current economic and real estate cycle, no area of reform will yield greater benefits than the abolition of stamp duties.
“With rising cost of living pressures, stamp duty remains a major hurdle for first-time home buyers, those wishing to move around the country or invest in much-needed rental supply,” said Mr. Groves.
The REIA executive noted that there is a general consensus among market participants that the stamp duty is “an ineffective and unfair tax” that hinders labor mobility and punishes those who seek to relocate to areas with better employment, education or lifestyle opportunities.
Groves added that stamp duties also pose an additional financial hurdle for aspiring home buyers, as fees can add about 4% to the median price of a home and rack up additional costs averaging $30,000 for the typical property bought in the country.
“First-time home buyers looking to buy established homes are forced to delay their buying decisions to save for stamp duty,” Groves said.
He also points out that the removal of the property purchase tax comes at a critical time when the market is struggling with a shortage of supply.
“At a time when housing supply presents such an immense challenge, removing stamp duty could increase sales and rental listings by up to 50% in the existing housing stock,” he said. .
“Both directly and indirectly, stamp duty contributes to the extremely low supply of real estate in Australia and impacts housing and rental affordability in every state and territory.”
According to Groves, the financial reprieve that accompanies the repeal of the stamp duty has the potential to “revive the economy, improve affordability and supply, and make the real estate market accessible to all”.
With the failure to implement stamp duty reforms when the goods and services tax was introduced in 2000, Mr Groves said the commitment would require the “will and collaboration of many” among real estate stakeholders.
Property refers to something tangible or intangible over which an individual or business has legal rights or ownership, such as houses, cars, stocks, or bond certificates.